Diabetes has a significant negative impact on mental health and quality of life (QoL). Underpinned by the Common Sense Model (CSM) the mediating role of coping patterns, self-efficacy, anxiety and depression symptoms on the relationship between illness perceptions and QoL in patients diagnosed with diabetes was evaluated. A total of 115 participants with diabetes (56, Type 1; 59, Type 2), 51% female and an average age of 52.69 (SD = 15.89) in Australia completed self-report measures of illness perceptions and psychological wellbeing. Baseline measures included illness perceptions, coping styles, psychological distress (anxiety and depression symptoms), self-efficacy, and quality of life. Mediating relationships were measured using structural equation modelling. A model of good fit was identified explaining 51% of the variation in QoL. Illness perceptions directly influenced QoL, maladaptive coping, self-efficacy, and anxiety symptoms. The relationship between illness perceptions and QoL was partially mediated by anxiety; illness perceptions and depression was fully mediated by maladaptive coping and self-efficacy; and self-efficacy and QoL was partially mediated by depressive symptoms. Findings provide validation of the CSM in a diabetes cohort. Psychological interventions likely to have the most benefit on psychological distress and QoL are those targeting mediating psychological processes, including maladaptive coping and self-efficacy.