Objective: Internet-based peer support groups (ISGs) represent an innovative, scalable approach to addressing information and support needs of cancer survivors. However, this innovation may not benefit survivors equally due to population variance in digital literacy. This study examined how digital literacy influences level of engagement in and psychological benefits from participating in ISGs for breast cancer (N = 183). Methods: Secondary analysis of data from a randomised trial of ISGs that included behavioural measures of engagement, subjective ratings and psychological distress symptoms. Results: Digital literacy was positively related to education level (p =.005). Relative to women with high digital literacy, those with lower digital literacy were more likely to report difficulties using the ISG and to value the user's guide and facilitator assistance (all p's <.05). Digital literacy was negatively correlated with computer anxiety pre-intervention, distress before and after online chat during the intervention and post-intervention depressive symptoms (all p's <.05). Conclusion: Low digital literacy is associated with computer anxiety and barriers to ISG use, as well as distress during and after ISG use. Digital literacy must be taken into account when designing or delivering innovative digital interventions for cancer survivors.