Objective: Overdiagnosis occurs when someone is diagnosed with a disease that will not harm them. Against a backdrop of growing evidence and concern about the risk of overdiagnosis associated with certain screening activities, and recognition of the need to better inform the public about it, we aimed to ask what the Australian community understood overdiagnosis to mean. Design, setting and participants: Content analysis of verbatim responses from a randomly sampled community telephone survey of 500 Australian adults, between January and February 2014. Data were analysed independently by two researchers. Main outcome measures: Analysis of themes arising from community responses to open-ended questions about the meaning of overdiagnosis. Results: The sample was broadly representative of the Australian population. Forty per cent of respondents thought overdiagnosis meant exaggerating a condition that was there, diagnosing something that was not there or too much diagnosis. Twenty-four per cent described overdiagnosis as overprescribing, overtesting or overtreatment. Only 3% considered overdiagnosis meant doctors gained financially. No respondents mentioned screening in conjunction with overdiagnosis, and over 10% of participants were unable to give an answer. Conclusions: Around half the community surveyed had an approximate understanding of overdiagnosis, although no one identified it as a screening risk and a quarter equated it with overuse. Strategies to inform people about the risk of overdiagnosis associated with screening and diagnostic tests, in clinical and public health settings, could build on a nascent understanding of the nature of the problem.