Background: Diabetes has debilitating and dangerous effects on any of the vital organs in the body. Its impact on quality of life, as well as the variables that impact it, is of great importance. Objectives: This study was conducted to design a structural equation model of the effect of diabetes distress and self-care activities on the quality of life of type 2 diabetes mellitus (T2DM) patients. Methods: This descriptive cross-sectional study included 398 patients with T2DM referred to medical centers affiliated with Ahvaz Jundishapur University of Medical Sciences in 2020; they were selected by convenience sampling method. Data collection tools included the Problem Areas in Diabetes Scale (PAID) used to identify depression and emotional stress associated with diabetes, Audit of Diabetes-Dependent Quality of Life 19 (ADDQoL-19) used to assess the physical, mental, and social status of patients, and Summary of Diabetes Self-care Activities used to evaluate the self-care behaviors of diabetic patients. Data were analyzed using SPSS version 26, Hayes PROCESS macro version 3.5, and path analysis regression. Results: The mean scores of diabetes distress, self-care activities, and quality of life were 3.69 ± 12.39, 65.57 ± 12.11, and 56.94 ± 18.62, respectively. Path analysis regression showed that for every 1-unit increase in the score of diabetes distress, quality of life decreased by 0.249, and for every 1-unit increase in the score of self-care activities, quality of life increased by 0.183 (P < 0.001). Also, for every 1-unit increase in the score of self-care activities, diabetes distress increased by 0.138 (P < 0.006). Conclusions: This study showed that T2DM patients who engaged in more diabetes self-care activities had a higher health-related quality of life. Also, patients with higher levels of diabetes-specific emotional distress have a lower health-related quality of life. Training on identifying and reducing the factors affecting distress and those promoting self-care behaviors in diabetic patients is highly recommended.