Epidemiological evidence about the prevalence of adolescent mental health issues and their association with mental health literacy is crucial for sustained mental health promotion strategies. Adolescence is a critical life stage for mental health promotion. However, evidence is not available among Ethiopian school adolescents. Hence, the present study examined the prevalence of adolescents' mental health issues and their correlation with mental health literacy. A cross-sectional study was conducted among adolescents (grades 5-12) in Dire Dawa city, Eastern Ethiopia using multistage random sampling. Data was collected using the Strength and Difficulty Questionnaire, WHO-5 well-being index, and mental health literacy questionnaire. SPSS version 25 was used for the descriptive, Chi-square, binary logistic regression, and correlation analyses. Between 14.0-24.5% of adolescents had reported mental health problems: internalizing problems (14.9-28.8%), emotional problems (10.4-25.5%), and peer relationship problems (17.8-25.5%). These mental health problems were significantly greater among adolescents who had either themselves or their family members used psychoactive substances (p≤0.05). Females from upper elementary (5-8 grade) and lower secondary (9-10) grade levels had a higher prevalence of mental health problems (AOR: 2.60 (0.95-7.10, p<0.05)). The effect of age, parental education, or employment status was insignificant (p>0.05). The prevalence of depression ranged from 18.0-25.5%. Mental health literacy was negatively correlated with total difficulties scores and positively associated with mental well-being scores (p<0.05). The prevalence of adolescents' mental health problems was higher. It implied that promoting mental health literacy could enhance adolescents' positive mental health. Intervention programs should prioritize vulnerable groups and individuals reporting symptoms of mental health difficulties. Future studies should involve qualitative studies and consider effect of other determinants.
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