Erectile dysfunction (ED) and low testosterone levels are common in men with type 2 diabetes (T2D). We have investigated the impact of testosterone on quality of life (QoL) in diabetic men with ED. Men with ED were identified within a study cohort of 355 men with T2D. All subjects completed SF-36 health and Androgen Deficiency of the Aging Male questionnaires. Total tesosterone (TT), bioavailable testosterone (BT) and sex hormone-binding globulin levels of study participants were measured and free testosterone levels were calculated (cFT). A subgroup of 126 ED patients completed the International Index of Erectile Function-5 (IIEF-5) questionnaire. Linear regression analyses were corrected for age, body mass index (BMI), glycosylated haemoglobin (HbA(1c)), smoking, alcohol consumption and cardiovascular disease (CVD). Total SF-36 scores significantly and positively correlated with TT levels (r=0.219, p=0.001), BT levels (r=0.199, p=0.004) and cFT levels (r=0.185, p=0.007) among men with ED. These trends were strengthened after adjusting for age, BMI, HbA(1c), smoking, alcohol consumption and CVD (TTr=0.359, p=0.015; BTr=0.354, p=0.024 and cFTr=0.354, p=0.024). IIEF-5 scores significantly correlated inversely with TT (r=0.546, p=0.001), BT (r=0.506, p=0.004) and cFT levels (r=0.532, p=0.001). A positive linear relationship was observed between IIEF-5 scores and total SF-36 score (r=0.491, p=0.003). Patients who reported having ED had an average SF-36 score of 9.1% less than those without ED (p<0.001). Lower testosterone and greater severity of ED independently correlated with poorer physical function, social function, vitality and decline in general health domains of the SF-36. This is the first study to report that testosterone deficiency and severity of ED are both independently associated with reduced QoL in men with T2D. Furthermore, ED and low testosterone are markers of poor health which impact on an individual's self-perception of their health status.