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Objectives: Enhancing health literacy among older adults is critical for reducing healthcare costs and achieving healthy ageing. Although prior research has emphasized individual socioeconomic and cognitive determinants, the mechanisms through which social capital shapes health literacy among older adults remain insufficiently understood. This study examines the multidimensional effects of social capital on health literacy, aiming to provide empirical evidence for targeted interventions in ageing societies.Methods: This study used data from the 2021 China General Social Survey (CGSS), comprising a nationally representative sample of older adults aged 60 years and above. Health literacy was constructed as a composite index based on factor analysis, incorporating three core domains: basic health knowledge and concepts, healthy lifestyle and behaviors, and essential health skills. Social capital was measured using the entropy weight method across four dimensions: social networks, social trust, social support, and social participation. The associations between social capital and health literacy were tested via multiple ordinary least squares (OLS) regression models and Ordered Probit models, addressing endogeneity with an instrumental variables two-stage least squares (IV-2SLS) regression approach. Additionally, we conducted heterogeneity analyses across gender, education level, and occupation (agricultural vs. non-agricultural employment), and performed robustness checks via model substitution.Results: The results show that social capital significantly enhances health literacy among older adults. All four dimensions exerted positive and statistically significant effects (p < 0.01). Sub-item analyses revealed that neighborhood social networks, family social networks, interpersonal trust, medical insurance coverage, emotional support, political voting participation, union organization participation, and cultural activity participation were particularly influential. Heterogeneity analysis showed that the effect of social capital on health literacy in agricultural employment was much larger than that in non-agricultural employment, and different education level groups benefited disproportionately—with the largest gains observed among those with low formal education. Endogeneity and robustness analyses confirmed the stability of the findings.Conclusions: This study demonstrates that social capital plays a crucial role in improving health literacy among older adults, with significant variations across employment and education subgroups. Policy efforts should adopt an integrated approach that simultaneously optimizes social network structures, cultivates a trustworthy social environment, innovates social support service modes, and refines social participation incentive mechanisms. Such multidimensional strategies are essential to promote healthy ageing and reduce health disparities in rapidly ageing societies.