Existing models of health literacy have included a limited perspective of children and adolescents. We conducted a meta-ethnography to develop a child- and adolescent-centered conceptualization of health literacy. We dually screened 3564 abstracts, 205 full texts, assessed the 40 included studies’ methodological limitations, and considered 25 data-rich studies in our synthesis. We assessed our confidence in each finding using GRADE-CERQual. Our model shows that health literacy development involves active information seeking (moderate confidence), passive information receiving (very low confidence), processing information (moderate confidence), and (not) taking action (moderate confidence). This process is embedded in a socio-cultural environment, educational system, healthcare system, internet/media, and living environment (very low to moderate confidence). Our model shows that children’s and adolescents’ health literacy is influenced by cognitive psychological (moderate confidence) and sociodemographic factors (moderate confidence). Social relationships play a crucial role (moderate confidence). Our model supports the development of evidence-based interventions and policies that promote youth and child well-being, laying the foundation for lifelong health literacy. This approach also provides a basis for future research to explore health literacy concepts that are grounded in young people’s real-life contexts. Registration: Before writing this manuscript, we developed a study protocol and registered it on PROSPERO: CRD4202343090.