Background: An ageing population worldwide needs to investigate quality of life (QoL) and level of functioning (LoF) in the elderly and its associated variables. We aimed to study the relationship between Quality of Life (QoL) and Level of Functioning (LoF) in an elderly population in Europe. Method: As part of the Ment_Dis65+ European Project, 3142 community-dwelling adults aged 65-84 years in six countries were assessed by using the adaptation for the elderly of the Composite International Diagnostic Interview (CIDI65+) to provide psychiatric diagnosis according to the International Classification of Diseases (10th edition) (ICD-10 Classification of Mental and Behavioural Disorders). Socio-demographic and clinical interviews, and two selfreport tools, the World Health Organization QoL assessment (WHO QoL BREF), to assess QoL, and the WHO Disability Assessment Schedule-II (WHODAS-II), to assess LoF, were also administered. Results: Most subjects reported good levels of QoL (56.6%) and self-rated health (62%), with no or mild disability (58.8%). There was a linear decrease of the QoL and the LoF by increase of age. Elderly with ICD-10 mental disorder (e.g. somatoform, affective and anxiety disorders) had poorer QoL and lower LoF. There were a number of predictors of lower levels of QoL and disability, including both socio-demographic variables (e.g. male gender, increase in age, poor financial situation, retirement, reduced number of close significant others), ICD-10 psychiatric diagnosis (mainly anxiety, somatoform disorders) and presence of medical disorders (mainly heart and respiratory diseases).