Background: Mental health issues and quality of life are among the critical items of general health in individuals, especially transgender subjects. The present study aimed to assess the quality of life, depression, anxiety, and stress in transgender women and determine the factors contributing to them. Methods: A cross-sectional study was performed on 127 Iranian transgender women using a convenience sampling method from August 2019 to April 2020. The Quality of Life (QOL) was determined using the World Health Organization (WHO) Questionnaire (WHOQOL-BREF). The DASS-21 questionnaire was employed to evaluate the subjects’ anxiety, depression, and stress. Results: In total, 48% of the individuals had a moderate QOL. The highest score was achieved in the physical health dimension and the lowest in social relationships. Depression, anxiety, and stress were severe and extremely severe in 22%, 20.4%, and 17.3% of the subjects, respectively. A significant relationship was observed between the overall perception of QOL and depression, anxiety, and stress (P<0.001). A significant positive association was observed between the subscales of QOL and education and favorable economic status among transgender women. Furthermore, a significant negative correlation existed between the subscales of QOL with age and sexual violence. Regarding mental health, education had a significant relationship with reduced stress and anxiety, and good economic status had a significant relationship with reduced depression. Still, sexual violence was associated with increased stress in individuals. Conclusion: The present study results emphasize that transgender women are at risk of mental health disorders, including depression, anxiety, and stress. These conditions are in close association with the quality of life in this population. Moreover, considering the high sexual violence in transgender women of the present study and its considerable effects on mental health disorders, there is a strong need to develop violence prevention services in the community and legal protections in this area. The culture of preventing violence against women in society should be emphasized, and education to families should be considered the first line of prevention.