The concept of 'health literacy' refers to the personal and relational factors that affect a person's ability to acquire, understand and use information about health and health services. For many years, efforts in the development of the concept of health literacy exceeded the development of measurement tools and interventions. Furthermore, the discourse about and development of health literacy in public health and in clinical settings were often substantially different. This paper provides an update about recently developed approaches to measurement that assess health literacy strengths and limitations of individuals and of groups across multiple aspects of health literacy. This advancement in measurement now allows diagnostic and problem-solving approaches to developing responses to identified strengths and limitations. In this paper, we consider how such an approach can be applied across the diverse range of settings in which health literacy has been applied. In particular, we consider some approaches to applying health literacy in the daily practice of health-service providers in many settings, and how new insights and tools - including approaches based on an understanding of diversity of health literacy needs in a target community - can contribute to improvements in practice. Finally, we present a model that attempts to integrate the concept of health literacy with concepts that are often considered to overlap with it. With careful consideration of the distinctions between prevailing concepts, health literacy can be used to complement many fields from individual patient care to community-level development, and from improving compliance to empowering individuals and communities.