Health literacy comprises an individual’s ability to adequately access, understand and utilise health information, enabling effective navigation of the healthcare system. Low health literacy is a problem for people living with substance use disorders (SUDs). This study aims to examine whether health literacy changes for people discharged from specialist SUD treatment services. Two hundred thirty-one people recruited from residential SUD treatment services across New South Wales, Australia, completed a questionnaire upon entry into the service and again at 6 months post-treatment. Treatment outcomes were also measured. Three health literacy profiles were identified: lowest (n = 52, 22.5%), moderate (n = 111, 48.1%) and highest health literacy (n = 68, 29.4%). Lowest and moderate profiles showed improved health literacy at 6 months. However, the lowest profile still had significantly lower health literacy, quality of life and higher levels of psychological distress compared with participants in the highest profile at 6 months. People within the lowest health literacy profile improved, although they continued to experience lower health literacy and some poorer treatment outcomes. Health literacy interventions tailored for people within lowest health literacy profiles should be implemented and assessed for effectiveness within specialist SUD treatment services.