© 2015 Taylor and Francis. Older adults commonly experience declines in prospective memory, which describes ones ability to "remember to remember," and can adversely affect instrumental activities of daily living and healthcare compliance. However, the extent to which prospective memory failures may influence quality of life in typically aging older adults is not well understood. One-hundred and four community-dwelling older Australians (aged 50 to 82 years) were administered a comprehensive, neuropsychological battery that included the Memory for Intentions Screening Test (MIST), Prospective and Retrospective Memory Questionnaire (PRMQ), Instrumental Activities of Daily Living Questionnaire (IADLQ), and World Health Organization Quality of Life-8 (WHOQOL-8). Multiple regressions controlling for negative affect, medical comorbidities, and other neurocognitive functions revealed an interaction between prospective memory and instrumental activities of daily living in the concurrent prediction of quality of life. Among the 39 older adults who reported multiple problems on the IADLQ, lower performance-based prospective memory (MIST) and higher self-reported prospective memory failures in daily life (PRMQ) were significantly associated with lower quality of life (WHOQOL-8). Conversely, no significant associations were observed between prospective memory and quality of life in the 65 participants without IADL problems. Prospective memory difficulties adversely impact quality of life in community-dwelling older adults who experience problems independently managing their instrumental activities of daily living. These findings extend prior literature showing that prospective memory plays a unique role in the real-world outcomes of older adults and clinical populations and highlight the need to develop effective strategies to enhance prospective memory functioning in these vulnerable groups.