The concept of theatre literacy appears extensively in the literature on theatre where its impact on audience attendance and engagement is recognised as profound, but also complex. This article analyses the data regarding theatre literacy from the TheatreSpace research project investigating the theatre experiences of young people, the largest of its kind to be conducted in Australia. The article discusses some of the most significant data gathered about the nature and impact of theatre literacy in young audiences aged 14 - 30 years. These include the finding that this age group need to do theatre themselves well as learn about it to be fully engaged and to conduct meaningful discourses about their experiences.