Aim This study examined the relationship between health literacy and self-care behaviours among individuals with type 2 diabetes and whether the association is mediated by patient engagement. Methods This cross-sectional study was conducted between November 2019 and September 2020. The sample consisted of 218 participants with type 2 diabetes, older than 18 years old, applying to two endocrine outpatient clinics in Turkey. Multiple regression analyses were performed to identify the relationship between health literacy and self-care behaviours. The Sobel test method was used to examine the mediation role of patient engagement. Results Sample characteristics included mean age of 53.7 years, 57.3% were female and the mean A1C was 7.8%. The regression equation analyses demonstrated that health literacy (beta = 0.219, P < 0.05) and patient engagement (beta = 2.844, P < 0.05) significantly predicted diabetes self-care behaviours. Patient engagement served a mediational role in the association of health literacy and self-care behaviours (z value = 2.049, P < 0.02). Conclusion Given the relationship between health literacy and diabetes self-care behaviours, the patient engagement concept presented a practical insight into the applicability of health-related information. Clinicians are recommended to consider patients' health literacy and engagement levels while planning customized interventions to facilitate diabetes management.