Patient's knowledge is a necessity for empowering patients to perform self-care, especially when dealing with new, ill-defined and unknown situations. The aim of this paper is to assess patients' reported as opposed to correct knowledge about medication therapy after discharge from hospital and to identify factors that increase correct knowledge. Three hundred and forty-one patients were interviewed 7-14 days after discharge from six internal wards in a large medical facility in Israel. Most patients (73%) were aware of the course and purpose of their medication. They were, however, unaware of side effects, needed lifestyle changes, and correct medication schedules. A large difference was found between levels of reported and correct knowledge about various issues regarding medication treatment. No significant correlation was found between correct knowledge about medication therapy at discharge, and gender, age, education, patient satisfaction and wish for more counseling. The only factor which significantly affected levels of correct knowledge was whether the patient had received medication counseling during hospitalization. The findings illuminate the gap between patients' perception of knowledge and actual knowledge. The study indicates the need for patient counseling during hospitalization, with respect to medication therapy.