Health-related knowledge is an important component in the self-management of chronic illnesses. The objective of this study was to more accurately assess racial differences in hypertension knowledge by using a latent variable modeling approach that controlled for sociodemographic factors and accounted for measurement issues in the assessment of hypertension knowledge. Cross-sectional data from 1,177 participants (45% African American; 35% female) were analyzed using a multiple indicator multiple causes (MIMIC) modeling approach. Available sociodemographic data included race, education, sex, financial status, and age. All participants completed six items on a hypertension knowledge questionnaire. Overall, the final model suggested that females, Whites, and patients with at least a high school diploma had higher latent knowledge scores than males, African Americans, and patients with less than a high school diploma, respectively. The model also detected differential item functioning (DIF) based on race for two of the items. Specifically, the error rate for African Americans was lower than would be expected given the lower level of latent knowledge on the items, on the questions related to: (a) the association between high blood pressure and kidney disease, and (b) the increased risk African Americans have for developing hypertension. Not accounting for DIF resulted in the difference between Whites and African Americans to be underestimated. These results are discussed in the context of the need for careful measurement of health-related constructs, and how measurement-related issues can result in an inaccurate estimation of racial differences in hypertension knowledge.