The objectives of the study were to design and develop a questionnaire to measure individuals’ perceptions of the impact of diabetes on their quality of life (QoL). The design of the ADDQoL (Audit of Diabetes Dependent QoL) was influenced by patient-centred principles underlying the SEIQoL interview method. Respondents rate only personally-applicable life domains, indicating importance and impact of diabetes. Fifty-two out-patients with diabetes and 102 attending diabetes education open days provided data for psychometric analyses. Each of the 13 domain-specific ADDQoL items was relevant and important for substantial numbers of respondents. Factor analysis and Cronbach’s alpha coefficient of internal consistency (0.85) supported combination of items into a scale. Insulin-treated patients reported greater impact of diabetes on QoL than table/diet-treated patients. People with microvascular complications showed, as expected, greater diabetes-related impairment of QoL than people without complications. Unlike other QoL measures, the ADDQoL is an individualized questionnaire measure of the impact of diabetes and its treatment on QoL. Preliminary evidence of reliability and validity is established for adults with diabetes. Findings suggest that the ADDQoL will be more sensitive to change and responsive to differences than generic QoL measures.