Objective: To assess the prospective relationship between obesity and health-related quality of life, including a novel assessment of the impact of health-related quality of life on weight gain. Design and setting: Longitudinal, national, population-based Australian Diabetes, Obesity and Lifestyle (AusDiab) study, with surveys conducted in 1999/2000 and 2004/2005. Participants: A total of 5985 men and women aged ≥25 years at study entry. Main outcome measure(s): At both time points, height, weight and waist circumference were measured and self-report data on health-related quality of life from the SF-36 questionnaire were obtained. Cross-sectional and bi-directional, prospective associations between obesity categories and health-related quality of life were assessed. Results: Higher body mass index (BMI) at baseline was associated with deterioration in health-related quality of life over 5 years for seven of the eight health-related quality of life domains in women (all P≤0.01, with the exception of mental health, P>0.05), and six out of eight in men (all P<0.05, with the exception of role-emotional, P=0.055, and mental health, P>0.05). Each of the quality-of-life domains related to mental health as well as the mental component summary were inversely associated with BMI change (all P<0.0001 for women and P≤0.01 for men), with the exception of vitality, which was significant in women only (P=0.008). For the physical domains, change in BMI was inversely associated with baseline general health in women only (P=0.023). Conclusions: Obesity was associated with a deterioration in health-related quality of life (including both physical and mental health domains) in this cohort of Australian adults followed over 5 years. Health-related quality of life was also a predictor of weight gain over 5 years, indicating a bi-directional association between obesity and health-related quality of life. The identification of those with poor health-related quality of life may be important in assessing the risk of future weight gain, and a focus on health-related quality of life may be beneficial in weight management strategies.