Background: Little is known about the association between diabetes and health related quality of life (HRQL) in lower-middle income countries. This study aimed to investigate HRQL among individuals with and without diabetes in Bangladesh. Methods: The analysis is based on data of a case-control study, including 591 patients with type 2 diabetes (cases) who attended an outpatient unit of a hospital in Dhaka and 591 age -and sex-matched individuals without diabetes (controls). Information about socio-demographic characteristics, health conditions, and HRQL were assessed in a structured interview. HRQL was measured with the EuroQol (EQ) visual analogue scale (VAS) and the EQ five-dimensional (5D) descriptive system. The association between diabetes status and quality of life was examined using multiple linear and logistic regression models. Results: Mean EQ-VAS score of patients with diabetes was 11.5 points lower (95 %-CI: -13.5, -9.6) compared to controls without diabetes. Patients with diabetes were more likely to report problems in all EQ-5D dimensions than controls, with the largest effect observed in the dimensions 'self-care' (OR = 5.9; 95 %-CI: 2.9, 11.8) and 'mobility' (OR = 4. 5; 95 %-CI: 3.0, -6.6). In patients with diabetes, male gender, high education, and high-income were associated with higher VAS score and diabetes duration and foot ulcer associated with lower VAS scores. Other diabetes-related complications were not significantly associated with HRQL. Conclusions: Our findings suggest that the impact of diabetes on HRQL in the Bangladeshi population is much higher than what is known from western populations and that unlike in western populations comorbidities/complications are not the driving factor for this effect.