Increasing media use among adolescents and its significant influence on health behavior warrants in-depth understanding of their response to media content. This study developed the concept and tested a model of Media Health Literacy (MHL), examined its association with personal/socio-demographic determinants and reported sources of health information, while analyzing its role in promoting empowerment and health behavior (cigarette/water-pipe smoking, nutritional/dieting habits, physical/sedentary activity, safety/injury behaviors and sexual behavior). The school-based study included a representative sample of 1316 Israeli adolescents, grades 7, 9 and 11, using qualitative and quantitative instruments to develop the new measure. The results showed that the MHL measure is highly scalable (0.80) includes four sequenced categories: identification/recognition, critical evaluation of health content in media, perceived influence on adolescents and intended action/reaction. Multivariate analysis showed that MHL was significantly higher among girls (β = 1.25, P < 0.001), adolescents whose mothers had higher education (β = 0.16, P = 0.04), who report more adult/interpersonal sources of health information (β = 0.23, P < 0.01) and was positively associated with health empowerment (β = 0.36, P < 0.0005) and health behavior (β = 0.03, P = 0.05). The findings suggest that as a determinant of adolescent health behavior, MHL identifies groups at risk and may provide a basis for health promotion among youth.