Oral health literacy (OHL) is increasingly recognized as a determinant of oral health outcomes; however, its relationship with children’s oral health related quality of life (OHRQoL) in rural Latin-American settings remains unclear. The objective was to examine the correlation between caregiver’s OHL and children’s OHRQoL in rural schools in Arauco, Chile. A cross-sectional study was conducted with 152 caregivers. Data was collected using the validated Cupé-Araujo OHL scale and the Early Childhood Oral Health Impact Scale (ECOHIS). OHRQoL was assessed through caregiver’s proxy reporting. Normality was tested with the Kolmogorov–Smirnov test, and Spearman’s rho (ρ) was used to evaluate associations. The average OHL score was 2.98 ± 0.9, and the mean ECOHIS score was 5.79 ± 6.17. A weak but statistically significant negative correlation was observed between OHL and OHRQoL (ρ = –0.173, P = 0.033). Higher OHL was observed among caregivers with greater education and better access to oral-health information (P < 0.05). Although no significant correlation was identified between caregivers’ OHL and children’s OHRQoL, socio-educational and informational factors appear to influence oral-health outcomes. These findings highlight the need for culturally tailored interventions to strengthen oral-health literacy in rural communities.