Background and Aim Type 2 diabetes mellitus (DM) has in recent decades become a global pandemic, accounting for over 90% of DM cases. The study evaluated the health‐related quality of life (HrQoL) and identified its determinants among type 2 DM patients at the University of Cape Coast Hospital. Methods We conducted our study at the University of Cape Coast Hospital from January to March 2022. The EQ‐5D‐5L questionnaire was administered to 68 type 2 DM patients. Data were then inputted into Microsoft Excel and analyzed accordingly using IBM SPSS statistical software version 26 and GraphPad Prism 8. Results The mean age of the participants was 60.71 ± 12.18 with 55.9% being females. The average systolic, diastolic blood pressure and fasting blood glucose (FBG) of participants were 140.99 ± 22.27, 85 ± 11.14 and 7.97 ± 2.66 respectively. With the EQ‐5D‐5L scale, participants reported severe to extreme problems mainly in pain/discomfort (19.1%) and mobility (8.8%) dimensions. Approximately 21% (14/68) of patients reported themselves as being in perfect health based on the EQ‐5D index score with no significant difference between males and females (p ≥ 0.05). On a scale of 0 to 100, most (26.5%) of the participants rated their general health state at 80. Age was significantly associated with all five dimensions while patients with comorbidities had higher odds of experiencing pain/discomfort and anxiety/depression. Conclusion The study reveals that pain/discomfort and anxiety/depression are the most experienced problems among patients with type 2 DM. The HrQoL of type 2 DM patients was also found to be affected by age, comorbidities, systolic and diastolic blood pressure. Therefore, identifying these factors and developing appropriate interventions is crucial for improving patient outcomes and enhancing treatment outcomes.