BACKGROUND: Prevalence of diabetes mellitus is increasing in developed and developing countries. Diabetes is known to strongly affect the health-related quality of life (HRQOL). HRQOL is also influenced by living conditions. We analysed the effects of having diabetes on HRQOL under the living conditions in refugee camps in the Gaza strip. METHODS: We studied a sample of 197 diabetic patients who were recruited from three refugee camps in the Gaza strip and 197 age- and sex-matched controls living in the same camps. To assess HRQOL, we used the World Health Organization Quality of Life questionnaire (WHOQOL-BREF) including four domains (physical health, psychological, social relations and environment). Domain scores were compared for cases (diabetic patients) and controls (persons without diabetes) and the impact of socio-economic factors was evaluated in both groups. RESULTS: All domains were strongly reduced in diabetic patients as compared to controls, with stronger effects in physical health (36.7 vs. 75.9 points of the 0-100 score) and psychological domains (34.8 vs. 70.0) and weaker effects in social relationships (52.4 vs. 71.4) and environment domains (23.4 vs. 36.2). The impact of diabetes on HRQOL was especially severe among females and older subjects (above 50 years). Low socioeconomic status had a strong negative impact on HRQOL in the younger age group (<50 years). CONCLUSION: HRQOL is strongly reduced in diabetic patients living in refugee camps in the Gaza strip. Women and older patients are especially affected.