Abstract Background Population-based cancer screening programs have been confirmed as a cost-effective strategy for early detection of colorectal cancer, leading to reduced mortality and morbidity. In Taiwan, the government has provided an immunochemical fecal occult blood test (iFOBT) every two years to all citizens aged 50 to 74 years since 2013. The study aims to determine the association between iFOBT uptake and health literacy (HL). Methods Data from the National Health Interview Survey (NHIS), a population-based cross-sectional survey conducted in 2021-22 in Taiwan, were applied. The European Health Literacy Survey Short Form (HLS-EU-Q16), self-reported iFOBT participation within the past 2 years, and covariates assessed by face-to-face interview. The present analysis included those age-eligible for screening (n = 3,871) and applied the survey-weighted multivariable logistic regression to estimate odds of iFOBT uptake between HL skill levels, controlling for age, education attainment, socioeconomic status, health status, and household urbanicity level. Results In general, 44.6% of participants had utilized the iFOBT, and 79.9% had adequate HL skills which reported higher iFOBT uptake rates (45.9%) than their counterparts (39.4%). Multivariable analysis showed that having adequate HL was associated with greater odds of iFOBT utilization (adjusted odds ratio [aOR] = 1.79; 95% CI: 1.29-2.49). Additionally, compared to those households registered in the township, participants in higher urbanicity levels had lower iFOBT uptake: city (aOR = 0.62; 95% CI: 0.47-0.82). Other predictors that contributed significantly were participants’ gender and having 2 or more chronic diseases. Conclusions Inadequate HL skills and urban residency may reduce participation in the CRC screening program, despite its free availability. More efforts should include literacy-friendly designed materials and the provision of tailored support in urban settings. Key messages • HL skills are significantly associated with the CRC screening uptake in Taiwan. Improving HL could have positive effects on people’s participation. • Urbanicity levels are also predictors associated with screening utilization. Disseminating health service information in localized ways should be a potential option.