This study assessed the prevalence of the inappropriate use of over-the-counter (OTC) cold medicine among adolescents and examined the relationships between knowledge, literacy, and the inappropriate use of OTC cold medicine. In 2015, a national representative sample of 6812 students from primary, middle, and high schools completed a survey in Taiwan. Self-administered questionnaires were collected. The results indicated that 22% of adolescents had taken OTC cold medicine in the past year, and 28.5% of them had taken inappropriate dosages. In addition, 15% of adolescents bought OTC cold medicine in the past year, 27% of them did not consult pharmacists. More than half of the adolescents surveyed had misperceptions about cold medicine. Multivariate analysis results indicated that adolescents who had lower levels of cold medicine knowledge, lower medication label literacy, and lower self-efficacy were more likely to engage in the inappropriate use of OTC cold medicine.