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.