Background: Diabetes mellitus (DM) is a chronic disease, leading to many complications and substantial decrease in patients' Health Related Quality of Life (HRQoL). HRQoL among diabetic patients could affect by concurrent various factors. Therefore, analysis of these concomitant factors using generalized structural equation model (GSEM) that takes account the complex network of relationship could be a more utilitarian approach to better understand factor affecting HRQoL. The present study aimed to assesses the level of HRQoL and its associated factors among adults with and without diabetes. Methods: A comparative cross-sectional study was conducted from March 13 to April 4, 2019 in Adama Hospital and Medical College and Adama city Kebele 2, 4 and 5, East Shewa Ethiopia. Data related to socio-demographics, behavioral, clinical factors and HRQoL were collected from 359 adults with diabetes & 415 adults without diabetes through face to face interviews. Data was entered to Epi-data 3.1 then it was exported to STATA 14 for further analysis. GSEM was employed to verify relationships and association among exogenous, mediating and endogenous variable concurrently. Results: Diabetic groups had a significant lower mean score in all domains of HRQoL than non-diabetic group (p-value< 0.0001). Depression had a direct negative effect on all domains of HRQoL in both groups. Fasting blood sugar also had a direct negative effect on all domains of HRQoL except social relation. Diabetes mellitus complication had a direct negative effect on both physical and psychological health. Low Medication adherence and poor diabetic self-care activity had a negative direct, indirect and total effect on physical and environmental health through fasting blood sugar.