This study aimed to explore the mediating effects of ADL and depression on the relationship between sleep quality and HRQOL among older people in rural China, while also exploring the moderating impact of loneliness. The study gathered data from a household survey conducted among 1587 Chinese rural older adults (mean age = 73.63 years). The collected data was analyzed using SPSS version 23.0 software (IBM, New York, USA) and the PROCESS macro version 4.0 program. The findings indicated a significant correlation between sleep quality, ADL, depression, loneliness and HRQOL. ADL and depression exhibited a chain mediation effect on the relationship between sleep quality and HRQOL. Notably, the association between sleep quality and HRQOL was entirely mediated by ADL and depression. Additionally, loneliness acted as a moderator in the relationship between ADL and HRQOL. The findings of this study suggest that interventions focusing on sleep quality should prioritize strategies for enhancing older adults’ ADL and depression as integral components of promoting older adults’ HRQOL.