Computer literacy is defined as the knowledge and ability to use computers and related technology efficiently, with skill levels ranging from elementary use to computer programming and advanced problem solving. Computer literacy can also refer to the comfort level someone has with using computer programs and applications. Another valuable component is understanding how computers work and operate. Computer literacy may be distinguished from computer programming, which primarily focuses on the design and coding of computer programs rather than the familiarity and skill in their use. Various countries, including the United Kingdom and the United States, have created initiatives to improve national computer literacy rates.

Computer literacy differs from digital literacy, which is the ability to communicate or find information on digital platforms. Comparatively, computer literacy measures the ability to use computers and to maintain a basic understanding of how they operate.

A person's computer literacy is commonly measured through questionnaires, which test their ability to write and modify text, trouble-shoot minor computer operating issues, and organize and analyze information on a computer.

To increase their computer literacy, computer users should distinguish which computer skills they want to improve, and learn to be more purposeful and accurate in their use of these skills. By learning more about computer literacy, users can discover more computer functions that are worth using.

Arguments for the use of computers in classroom settings, and thus for the promotion of computer literacy, are primarily vocational or practical. Computers are essential in the modern-day workplace. The instruction of computer literacy in education is intended to provide students with employable skills.

Rapid changes in technology make it difficult to predict the next five years of computer literacy. Computer literacy projects have support in many countries because they conform to general political and economic principles of those countries' public and private organizations. The Internet offers great potential for the effective and widespread dissemination of knowledge and for the integration of technological advances. Improvements in computer literacy facilitate this.

The term "computer literacy" is usually attributed to Arthur Luehrmann, a physicist at Dartmouth College who was a colleague of Kemeny and Kurtz who introduced the BASIC programming language in 1964. Luehrmann became a tireless advocate of computers in teaching. At an April 1972 American Federation of Information Processing Societies (AFIPS) conference, Luehrmann gave a talk titled "Should the computer teach the student, or vice-versa?" The paper is available online. In it he notes:

If the computer is so powerful a resource that it can be programmed to simulate the instructional process, shouldn’t we be teaching our students mastery of this powerful intellectual tool? Is it enough that a student be the subject of computer administered instruction—the enduser of a new technology? Or should his education also include learning to use the computer (1) to get information in the social sciences from a large database inquiry system, or (2) to simulate an ecological system, or (3) to solve problems by using algorithms, or (4) to acquire laboratory data and analyze it, or (5) to represent textual information for editing and analysis, or (6) to represent musical information for analysis, or (7) to create and process graphical information? These uses of computers in education cause students to become masters of computing, not merely its subjects.