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Almost one million of Croatian millennials, people between the ages of 18 and 30, are using Facebook. With a large amount of information available on Facebook, users need to employ media literacy strategies in order to access and critically consume that information, as well as produce their own content to share. Because of low costs and high reach, there is also an increasing number of advertisements on Facebook, often in the form of paid posts. In order to be able to recognize and critically assess advertising, users need a certain level of advertising literacy. Therefore, this research investigated the overall levels of media and advertising literacy among Croatian millennials, as well as the effects of intensity of Facebook usage and media literacy on advertising literacy on Facebook. The overall question of this research was whether Facebook usage and media literacy are positive predictors for advertising literacy. To answer this question, an online survey was conducted during which participants were asked questions to determine their intensity of Facebook usage and media and advertising literacy. The participants were recruited through Facebook using snowball sampling. The findings showed that the overall level of media literacy of the Croatian millennials was high, attitudinal advertising literacy was high, but the ability to recognize advertising depended on disclaimers presented with paid posts. The results showed that media literacy positively influenced understanding of persuasive intent, but had limited effect on other segments of advertising literacy. At the same time, intensity of Facebook usage had limited effects on both media and advertising literacy. In order to increase people’s ability to recognize advertising, disclaimers of paid posts need to be clearly visible, and possibly regulated with industry guidelines. Media and advertising literacy modules should also be present in the educational system, and individuals need to become aware that their levels of advertising literacy are not as high as they perceive.