The COVID-19 pandemic has profoundly impacted healthcare systems and the training of healthcare professionals globally. This cross-sectional study investigated the relationship between fear of COVID-19 and health literacy among 322 nursing and medical students in Saudi Arabia. Participants, selected through stratified random sampling, completed the Fear of COVID-19 Scale (FCoV-19 S) and the short-form Health Literacy (HLS-SF12) questionnaires. The results revealed that age, gender, academic year, and health literacy levels significantly influenced fear scores. Higher health literacy was associated with lower levels of fear, emphasizing the importance of education in alleviating pandemic-related anxiety. Key predictors of fear included personal COVID-19 experiences, perceived likelihood of infection, and symptom severity, while knowledge of prevention served as a protective factor. These findings can inform interventions aimed at enhancing health literacy and mental well-being among healthcare students, equipping them for future public health challenges. The study highlights the necessity for targeted education and communication strategies to effectively reduce fear during pandemics. Future research should examine additional factors influencing fear and evaluate the effectiveness of educational interventions.