Objectives: Understanding the factors that promote quality of life (QOL) in menopausal women is essential for establishing educational strategies and health policies. Studies on the relationship between health literacy and QOL in menopausal women in Iran are rare. Therefore, we aimed to determine health literacy in menopausal women and its relationship with QOL. Methods: The present cross-sectional study was performed on 177 menopausal women referred to comprehensive health services in Hamadan City, Iran. Health Literacy for Iranian Adults and Menopause-Specific QOL questionnaires were used to collect information. Pearson correlation coefficient was used to assess the correlation between health literacy and QOL. Results: The majority of menopausal women included in this study were married housewives, and 44.6% of them were 50–55 years old; furthermore, only 6.2% had adequate or good health literacy. Health literacy was significantly correlated with total QOL score and vasomotor, psychology, and physical domains (P < 0.05). Conclusions Health literacy was associated with various domains of QOL. Therefore, health providers should pay more attention on improving health literacy by holding educational promotional programs for menopausal women to enhance their QOL.