Type 1 diabetes mellitus (T1DM) is a major problem worldwide that affects the quality of life, well-being of patients and their families. This study aimed to determine the relationship between the cost of illness and quality of life among patients with T1DM. A concurrent, parallel, mixed-method study of 113 adolescents with T1DM registered in public and private hospitals in the Mysore district was conducted by obtaining data related to the cost of illness and quality of life using a validated Diabetes-Specific Quality of Life (DSQoL) questionnaire. Thematic analysis was used to identify the themes. There was a significant association amonghealth insurance status, treatment facility type, catastrophic health expenditure (CHE), and cost of illness. The CHE proportion was32.7%. Financial sources for treatment were met primarily by borrowing money with interest (58 patients, 51.3%), followed by individualincome (40 patients, 35.3%), contributions from friends and relatives (10 patients, 8.8%), and selling of assets (5 patients, 4.4%). The monthly health expenditures of approximately 22 (19.46%) households were greater than their monthly incomes. There was a positive correlation (rvalue of 0.979) between the cost of treatment and the DSQoL score, and this correlation was statistically significant, with a p value < 0.001. The higher theDSQoL score was, the worse the quality of life and the worse the well-being of T1DM patients. Three themes were identified: the impact of financial cost on family coping, the impact of financial cost on seeking care and the emotional burden of financial cost. There was a statistically significant positive correlation between the cost of treatment and the DSQoLscore. Adolescents with T1DM who had greatertreatment costs had worseDSQoL, and significantly lower health expenses were observed among adolescentswho had health insurance. Cost of illness acts as a barrier to treatment and placesa burden on patients and their families.