Health literacy is the ability to obtain and utilize health information to make health-related decisions and to navigate health systems. Although health literacy has traditionally been understood as an individual-level construct, current research is revealing the impact that social networks can have on health literacy. To date, no studies have examined associations between health literacy and social networks among people with serious mental illness (PWSMI), who are at high risk of physical illness and premature mortality. To begin to fill this gap, this study explores associations between health literacy, relationships with health discussion partners, and self-reported health outcomes in a racially diverse sample of Clubhouse members in Hawai'i. Clubhouses are community mental health centers that promote recovery from mental illness through destigmatization, meaningful activity, and strong social relationships. Health literacy was assessed using two single-item screeners (SILS). In a sample of 163 members, 56.2% reported adequate ability to understand health-related instructions or pamphlets, and 43.3% reported adequate confidence filling out medical forms independently. This is consistent with other health literacy studies with PWSMI in the United States, and indicates lower health literacy within this group than is reported in national averages. Multivariate logistic regression revealed a larger Clubhouse staff social network and completing high school were significantly associated with requiring less help to read materials. Higher age, male gender, and being Native Hawaiian and/or Pacific Islander were associated with less confidence filling out medical forms, while higher self-efficacy was associated with higher confidence filling out medical forms. This study provides preliminary evidence that relationships fostered within Clubhouses are associated with health literacy among PWSMI, and highlights the need for more research to examine how social networks and health literacy interventions can be leveraged in community mental health settings to improve health outcomes within this vulnerable population.