Purpose To investigate, in adolescents referred for psychiatric services, the associations of initial self-esteem and family functioning with level and change of quality of life (QoL) over a 3-year period, over and above the effect of their emotional problems. Methods Of 1648 eligible 13-18 years old patients attending the child and adolescent psychiatric clinic (CAP) at least once, 717 (54.8% females) were enrolled at baseline (a response rate of 43.5%). Self-and parent reports on the McMaster Family Assessment Device were obtained. Adolescents reported self-esteem on the Rosenberg Scale, and emotional problems on the Symptom Check List-5. Adolescents completed the Inventory of Life Quality in Children and Adolescents (ILC). After 3 years, 570 adolescents again completed the ILC, and for 418 adolescents parent information was available. The longitudinal analysis sample of 418 adolescents was representative of the baseline sample for age, gender, emotional problems, and QoL. We used modified growth-model analysis, adjusted for SES, age, gender and time of contact with CAP, where residual variances for ILC at baseline and follow-up were fixed to 0. Results A poorer family functioning at baseline, reported by parents, was significantly associated with worsening QoL during the 3 years follow-up period (p = 0.001). Conclusions Parents have important knowledge about their families that may reflect long-term influences on QoL development in adolescent psychiatric patients. Health care providers and policy makers should optimize treatment outcomes by addressing family functioning in adolescents with emotional problems.