Background Accurate and reliable diagnosis is the cornerstone of disease management and control. A reliable and properly organized laboratory system not only generates information critical to individual case management but also to disease surveillance, control, and outbreak management. This study presents the status of quality of laboratory services in Tanzania after a nationwide quality assessment, Star Rating Assessment (SRA) of PHC facilities conducted in 2017/18. Methods This was a cross-sectional study using secondary data from SRA dataset. Eight indicators were used to measure quality of laboratory services; of which together with facility characteristics are considered independent variables. Dependent variable is the general scores for laboratory services during SRA. Firstly, proportions of facilities for the indicators was calculated. Then, multiple linear regression was employed to determine impact of each variable on quality of laboratory services. P-value of < 0.05 was considered significant. Results Approximately one-quarter of 6,663 PHC facilities included, i.e., 1,773(26.6%) had appropriate staffing level for qualified health laboratory personnel. The situation was better in private facilities compared to public facilities (63% vs 19%, p<0.001); and in urban-based facilities compared to rural-based facilities (62% vs 16%, p<0.001). None of the indicators was complied with at least half of the facilities. Three indicators were the strongest positive predictor of laboratory quality scores: having a laboratory safety system (Beta = 3.403), availability of essential laboratory tests with SOPs available and adhered (Beta = 2.739), and appropriate staffing level for laboratory personnel (Beta = 1.498). The scores were likely to be low if the facility was a dispensary (Beta = -1.325), located in a rural area (Beta = -0.068) or publicly owned (Beta = -0.048). Conclusion There is a critical shortage of qualified laboratory personnel in PHC facilities, especially in public facilities that are based in rural areas. There is a need to further strengthen laboratory services in PHC facilities to ensure quality of laboratory test results, since none of the indicators was complied with at least half of the facilities