Traditional Chinese Medicine (TCM), as a unique health resource and outstanding cultural resource in China, plays a non-negligible role in enhancing health literacy as well as the cultural sense of belonging and identity among Chinese residents. However, while the research efforts in this area predominantly center on assessing the existing levels of TCM health literacy (TCMHL), relatively few studies have been conducted on influencing factors. Therefore, this study employed hierarchical regression analysis to explore the complex interactive relationships among TCMHL, social capital, health information acquisition patterns and individual socioeconomic factors. Leveraging a dataset of 325 valid cases, the key findings are as follows: The TCMHL of the elderly population surpasses the average level in Shanghai of 2016; Income, health information acquisition channels, the degree of personal health concern, and social participation, have a substantial impact on the TCMHL levels of the elderly in community settings; Access to information and visualization in public spaces is the core of intervention design, which can effectively solve the two major obstacles of the elderly: the inability to distinguish whether health knowledge is true or false and health knowledge materials or lectures are difficult to understand. This study provides a basis for the formulation of relevant policies on the popularization of TCMHL in Chinese communities.