This study aims to explore the role of knowledge of content and students of a prospective mathematics teacher in designing learning that integrates mathematical literacy into mathematics teaching and learning. This research was a case study with a single-case design. A participant selected from 75 prospective mathematics teachers through purposive sampling techniques was assigned to compile two sets of learning tools to teach mathematical literacy through learning the concepts of relationships and functions. The data were collected through in-depth semi-structured interviews based on her experiences of designing the learning tools. Then, the data were analyzed to reveal the role of Knowledge of Content and Students (KCS) in designing the learning. The results of the analysis show that KCS has a considerable role in the prospective mathematics teacher in designing learning. The researcher found that knowledge of students’ mastery of the prerequisite materials affected the depth of the material; knowledge about students’ misconceptions, errors, or difficulties influence teaching strategy decision and organizing learning material, and knowledge of students’ interests, motivation influences the selection of problem contexts and strategies to encourage students’ active participation in the class.