Objective The aim of the present study was to describe how one regional health service the Illawarra Shoalhaven Local Health District embedded health literacy principles into health systems over a 3-year period. Methods Using a case study approach, this article describes the development of key programs and the manner in which clinical incidents were used to create a health environment that allows consumers the right to equitably access quality health services and to participate in their own health care. Results The key outcomes demonstrating successful embedding of health literacy into health systems in this regional health service include the creation of a governance structure and web-based platform for developing and testing plain English consumer health information, a clearly defined process to engage with consumers, development of the health literacy ambassador training program and integrating health literacy into clinical quality improvement processes via a formal program with consumers to guide processes such as improvements to access and navigation around hospital sites. Conclusions The Illawarra Shoalhaven Local Health District has developed an evidence-based health literacy framework, guided by the core principles of universal precaution and organisational responsibility. Health literacy was also viewed as both an outcome and a process. The approach taken by the Illawarra Shoalhaven Local Health District to address poor health literacy in a coordinated way has been recognised by the Australian Commission on Safety and Quality in Health Care as an exemplar of a coordinated approach to embed health literacy into health systems. What is known about the topic? Poor health literacy is a significant national concern in Australia. The leadership, governance and consumer partnership culture of a health organisation can have considerable effects on an individual's ability to access, understand and apply the health-related information and services available to them. Currently, only 40% of consumers in Australia have the health literacy skills needed to understand everyday health information to effectively access and use health services. What does this paper add? Addressing health literacy in a coordinated way has the potential to increase safety and quality of care. This paper outlines the practical and sustainable actions the Illawarra Shoalhaven Local Health District took to partner with consumers to address health literacy and to improve the health experience and health outcomes of consumers. Embedding health literacy into public health services requires a coordinated whole-of-organisation approach; it requires the integration of leadership and governance, revision of consumer health information and revision of consumer and staff processes to effect change and support the delivery of health-literate healthcare services. What are the implications for practitioners? Embedding health literacy into health systems promotes equitable, safe and quality healthcare. Practitioners in a health-literate environment adopt consumer-centred communication and care strategies, provide information in a way that is easy to understand and follow and involve consumers and their families in decisions regarding and management of the consumer's care.