Objectives As Iran is one of the countries in the world which its population moves toward aging rapidly, it is essential to consider older adults' needs and concerns, which might have an impact on their healthrelated Quality of Life (QOL). QOL is a multi-dimensional concept that has physical, mental, and social components. The present study has been conducted to determine the correlation between economic status and educational level with health-related QOL in community-dwelling and institutionalized older adults living in Mashhad City, Iran. Methods & Materials In this descriptive-analytic cross-sectional study, we recruited 135 (77 [57%] men and 58 [43%] women) community-dwelling older adults (Mean± SD=71. 7± 5. 9 y), and 135 (65 [48. 1%] men, 70 [51. 9%] women) institutionalized older adults (Mean± SD=071. 2± 5. 6 y). They were living in Mashhad City, Iran. Through the interview, we collected the subjects’ demographic characteristics, monthly income, and the level of education. The Persian validated version of SF-36 questionnaire was used for assessment of health-related QOL. The questionnaire assesses 8 physical and mental health subscales. The statistical analysis was conducted by SPSS version 19. The Mann-Whitney U test was used to compare monthly income and health-related QOL between community-dwelling and institutionalized older adults. The Chi-square test was used to compare the educational level of the two groups. Also, the effect of some independent variables on physical and mental health domains of QOL was assessed by multiple regression models. Results The education level community-dwelling older adults was lower than that in institutionalized older adults (P=0. 03). In general, in terms of physical and mental dimensions of QOL, the institutionalized older adults had a lower QOL than community-dwelling older adults (P<0. 01). Also, the institutionalized older adults had lower monthly income than community-dwelling older people (P<0. 001). The results of multiple regression model indicate that only living place of the elderly (community, nursing home) had a significant effect on both physical and mental dimensions of QOL (P<0. 001). While the elderly’ s income, education, gender, age, diseases (such as diabetes, blood pressure) and smoking didn’ t have any significant effects. Conclusion A higher level of education can promote the social class and increase the income of older people. Having enough income is a prerequisite of high QOL, although it cannot meet all the basic needs of life. Improving health-related QOL of old Iranian adults is achieved by considering all its dimensions, including physical, emotional and social needs, and using interventional, educational, and social support programs.