PurposeWe estimated the association between corneal ulcer and two outcomes: visual impairment and vision-related quality of life. We investigated for differential effects by rural/urban location. DesignPopulation-based matched prospective cohort study. MethodsWe followed 540 incident corneal ulcer cases identified in a cluster randomized trial in Nepal. Cases were pair-matched to individuals without incident corneal ulcers by age, sex and location using incidence density sampling. Clinical examinations were performed to assess outcomes in both groups after 12 months, which included visual acuity and a modified version of the Hong Kong vision-related quality of life questionnaire. Results392 matched pairs had complete outcome data and were included in the analyses. Median age was 42 years (interquartile range [IQR]: 28, 53) and 63.8 % were female. After controlling for education and occupation, corneal ulcer was associated with an approximately 1-line reduction in visual acuity (0.11 logMAR units, 95 % CI 0.06 to 0.15, P < 0.001), and with an increased risk of low vision/blindness (adjusted risk ratio 1.89, 95 % CI 1.44 to 2.48, P < 0.001). Corneal ulcer was associated with lower vision-related quality of life on the 20-question questionnaire (adjusted mean difference in score -1.69, 95 % CI -2.78 to -0.61, P = 0.002). We were unable to demonstrate effect modification for any outcome by rural/urban status. ConclusionsWe observed worse visual acuity and lower vision-related quality of life among those with incident corneal ulcers compared to those without. The population-based design, which captured the full spectrum of disease, confirms that corneal ulcers are an important cause of vision loss in the general population of Nepal and highlights the need for effective community-based corneal ulcer prevention interventions.