Quality of life (QOL) considerations are important in the treatment decision making process for prostate cancer patients. Although patient involvement in the treatment decision process has been encouraged, low health literacy can limit patient understanding of the complex information about treatments and their probable QOL outcomes and is a barrier to patient participation in the decision-making process. The objectives of the study were to evaluate (i) knowledge, level of satisfaction, and treatment preferences and intentions of men newly diagnosed with prostate cancer after participation in a CD-ROM shared decision making program; and (ii) the relationship between prostate cancer knowledge and health literacy. Thirty newly diagnosed prostate cancer patients from two Veteran's Administration (VA) hospitals in Chicago completed a demographic questionnaire and participated in an interactive CD-ROM shared decision making program. Subsequently, knowledge of prostate cancer, satisfaction with the information in the computer CD-ROM program, treatment preferences, and likelihood of following treatment preferences were assessed using interviewer-administered questionnaires. Health literacy was assessed using the Rapid Estimate of Adult Literacy in Medicine (REALM). The Pearson correlation test was used to assess the relationship between health literacy and prostate cancer knowledge. The χ2 test and the Fischer exact test were used to evaluate relationships between patient demographics and other variables. More than three-quarters of the patients rated the information in the CD-ROM as "very satisfactory" (highest possible rating). Two-thirds of the patients (21 of 30) selected a treatment after participation in the CD-ROM program and 90.5% of these patients stated that they were very or somewhat likely to adhere to their selection. However, prostate cancer knowledge was variable, with one-third of the patients scoring 69.9% or lower. Participants' health literacy was equivalent to a 7th-8th grade reading level (mean = 57.1 ± 10.9), and more than one-third of participants (36.7%) had lower than 9th grade literacy levels. Participants' prostate cancer knowledge was correlated with health literacy (Pearson correlation ρr = 0.65, ρp = 0.0001). Patients were satisfied with the interactive shared decision making CD-ROM program, and two-thirds of patients were able to select a preferred treatment based on the information presented in the program that they intended to follow. However, prostate cancer knowledge scores varied among participants after participation in the CD-ROM program, raising doubts that patients were adequately informed to make appropriate choices regarding their treatment. Lower prostate cancer knowledge scores corresponded to lower literacy scores, indicating that low literacy may have hindered patient understanding of the shared decision making program. The development of shared decision making tools should include collaborative efforts with the target population to improve the success of shared decision making programs among patients with low health literacy.