Introduction HIV/AIDS remains a public health concern affecting millions of people across the world. Although the health-related quality of life (HRQoL) of patients living with HIV has significantly improved after treatment, its chronicity makes the HRQoL uncertain. This study assessed factors associated with the health-related quality of life among people living with HIV/AIDS on HAART in North-East Ethiopia. Methods An institutional-based cross-sectional study was conducted from March to April 2018, and systematic random sampling was used to select 235 participants who were on HAART. HRQoL was assessed using the Medical Outcomes Study HIV Health Survey. Descriptive and multiple linear regression analysis were computed using the statistical package for social sciences version 20. Results The study revealed one-factor structure and had good overall internal consistency (78.5). Over one-third (42.6%; 95% CI; 36.2%, 48.9%) of participants had good HRQoL. The least HRQoL mean score was found for cognitive functioning 32.21(±19.78), followed by social functioning 40.58(±29.8). Factors associated with the overall HRQoL were 25–45 years of age (β = − 3.55, 95% CI;-6.54, -0.55), working in private sector (β = -5.66, 95% CI;-9.43, -1.88), government (β = -4.29, 95% CI;-7.83, -0.75) and self-employment (β = -8.86, 95% CI;-13.50, -4.21), 100–200 (β = − 4.84, 95% CI;-9.04, -0.63) and 201–350 CD4 at the time of diagnosis (β = − 7.45, 95% CI;-11.73, -3.16), 351–500 current CD4 level (β = 8.34, 95% CI;5.55, 11.41), 6–10 years of disease duration (β = -8.28, 95% CI;-12.51, -4.04), WHO stage II (β = -4.78, 95% CI;-8.52, -1.04) and III (β = 3.42, 95% CI;0.06, 6.79) during treatment initiation and not taking of Cotrimoxazole prophylaxis (β = -5.79, 95% CI;-8.34, -3.25). Conclusions High proportion of participants had a poor HRQoL. Routine assessment and appropriate interventions at each visit is recommended to improve HRQoL.