Background: Health literacy research in school gardening is lacking. Development of a psychometrically sound survey can fill this gap. Purpose: The purpose of this study was twofold: (1) to develop and validate a Functional Health Literacy Survey for School Gardening (FHLS-SG), and (2) to determine the effect of health literacy on reciprocal determinism between the individual, environmental, and behavioral factors of school gardening. Methods: 651 children in grades K-4 took the FHLS-SG with 31 questions about gardening and health literacy aligned to social cognitive theory. Results: Cronbach's alpha for 6 factors ranging from 0.69 to 0.84, and test-retest reliability ranging from 0.59 to 0.81 were statistically significant. Health literacy showed a small mediation effect (M) between vegetable eating behavior and the individual (M = 0.27) and vegetable eating behavior and the garden environment (M = 0.22). Health literacy had the strongest mediation effect (M = 0.36) between the garden environment and the individual. Discussion: When classroom environment was used as a covariate, health literacy mediated all relationships between the individual, environmental, and behavioral factors with small to medium effects (p < 0.01). Translation to Health Education Practice: Reciprocal determinism between individual, behavioral, and environmental factors was supported. Health literacy mediated all relationships with small to medium effects. The FHLS-SG can assess the mediating effect of health literacy on vegetable eating behavior within school garden environments.