AIMS: We examined the association of quality of life with glucose tolerance status in an Australian population to determine the stage in the development of diabetes that quality of life is impaired. METHODS: The Australian Diabetes, Obesity and Lifestyle study (AusDiab) was a population-based study of 11,247 people from randomly selected areas of Australia. As part of the study, participants underwent an oral glucose tolerance test and completed the SF-36 quality of life questionnaire. RESULTS: Previously diagnosed diabetes was associated with a significantly greater risk of being in the lowest quartile of each dimension of the SF-36 scale (except for mental health) and this association was only partially attenuated by adjustment for age, sex, body mass index (BMI), physical activity and treatment for hypertension and lipid abnormalities (adjusted odds ratios [95% CI]: bodily pain, 1.51 [1.18-1.94]; general health, 2.20 [1.64-2.95]; physical functioning, 1.50 [1.10-2.05]; role limitation (emotional), 1.43 [1.07-1.91]; role limitation (physical), 1.57 [1.13-2.18]; social functioning, 1.93 [1.46-2.54] and vitality, 2.24 [1.56-3.22]. Among those with newly diagnosed diabetes (NDM) and impaired glucose tolerance (IGT), there was also evidence of reduced quality of life on some dimensions of the SF-36 scale (NDM, general health, physical functioning and role limitation (physical); IGT, physical functioning and social functioning) after adjustment for confounders. CONCLUSION: These findings show that diabetes is associated with a reduced quality of life and that this is evident in the early stage of the disease, particularly in relation to the ability to perform physical activities.