Environmental exposure to dust from quarrying activities could pose health dangers to the population living nearby. This study aimed to investigate the health effects of dust exposure on people living close to quarry sites and compared them with those who live far from the quarry sites. A cross-sectional comparative study was conducted among 79 exposed participants, who lived less than 500 m away from the quarry sites, and 79 control participants who lived more than 500 m away. All participants answered a questionnaire on dust exposure at home and health effects, as well as performed a lung function test in which both reported and measured health effects were investigated. People who live in close proximity to the quarry sites reported exposure to dust at home (98%), land destruction (85%), plant leaves covered with dust (97%), and an inability to grow crops (92%). The exposed group reported significantly higher eye and nasal allergy (22% vs. 3%), eye soreness (18% vs. 1%), and dryness (17% vs. 3%), chest tightness (9% vs. 1%), and chronic cough (11% vs. 0%) compared to the control group. Lung function parameters were significantly lower among the exposed group compared to the control group; mean forced vital capacity (FVC) was 3.35 L vs. 3.71 L (p = 0.001), mean forced expiratory volume in the first second (FEV1) was 2.78 L vs. 3.17 L (p = 0.001). Higher levels of airway restriction were found among the exposed group. Among the exposed group, lung function parameters worsened with the increasing closeness of home to the quarry site. This study demonstrates the negative health effects of environmental dust exposure among two communities living near quarry sites in Palestine. The results highlight the importance of developing and strictly enforcing rules and regulations in Palestine to protect population health.