This study aimed to investigate the mental health and wellbeing literacy of Australian adults by examining their ability to correctly discriminate mental health and wellbeing indicators. Mental health indicators were symptoms of Major Depression Disorder (MDD) and Generalized Anxiety Disorder (GAD) from the Diagnostic and Statistical Manual of Mental Disorders (DSM). Wellbeing indicators were derived from the European Social Survey (ESS) personal wellbeing module and reflect hedonic, eudaimonic and social wellbeing domains. A sample of 705 Australian adults aged > 18 years (M = 50; SD = 15.9) were recruited to an online survey and assigned into one of two conditions in which indicators were either negatively (Ncondition1 = 359) or positively (Ncondition2 = 346) framed. In an initial discrimination task, participants were generally able to correctly identify indicators as reflecting mental health or wellbeing. While those in the positive condition reported slightly higher literacy, this was attributed to differences on only a couple of items. In a second discrimination task, participants were provided the additional option of classifying indicators as reflecting “both mental health and wellbeing” which, in both conditions, was how most participants generally classified both wellbeing and mental health indicators. Although many wellbeing and mental health researchers carefully discriminate between wellbeing and mental health, for lay community members, this distinction may be less important. These findings have implications for theoretical frameworks of mental health and wellbeing, may inform clinical practice, and can be used to improve the quality of educational campaigns targeting community mental health and wellbeing literacy.