Quality of life (QOL) in patients with diabetes is affected by multiple factors, and this study aimed to determine the effect of health locus of control points (HLOC) and diabetes health literacy (DHL) on QOL in Iranian patients with type 2 diabetes. This cross-sectional study was conducted between October 2021 and February 2022 among 564 people with type 2 diabetes. Patients were selected using proportional stratified sampling and simple random sampling methods. Data were collected using three questionnaires: (1) Multidimensional Health Locus of Control scale (form C), (2) World Health Organization Quality of Life Scale, and (3) Diabetes Health Literacy Scale. Data were analyzed by software’s of SPSS V22 and AMOS V24. There was a positive and significant correlation between DHL and QOL. There was a positive and significant correlation between the subscales of internal HLOC, and doctors HLOC with QOL. According to the Path analysis results, all variables showed 58.93% of the direct effects and 41.07% of indirect effects of the final model. Numerate health literacy, informational health literacy, communicative health literacy, internal HLOC, other powerful people HLOC, chance HLOC, and doctors HLOC were able to predicted 49% variance of diabetes QOL (R2 = 0.49). The subscales of communicative health literacy, informational health literacy, internal HLOC, doctors HLOC, and chance HLOC had the greatest impact on QOL of people with diabetes. Based on the results of Path analysis, diabetes health literacy and HLOC play an effective role in QOL of diabetic. Therefore, there is a need to design and implement programs to improve the health literacy of patients as well as HLOC to improve QOL of patients.