Background Malnutrition and altered body composition are well-documented in chronic pulmonary diseases; however, investigation of nutritional status in interstitial lung disease (ILD) is limited. This study aimed to describe the nutritional status of ILD patients within three diagnostic groups and explore the relationship between nutritional status and quality of life (QoL). Methods Consecutive patients attending an ILD clinic within a tertiary referral hospital in Sydney, Australia were studied. Weight, body-mass-index, anthropometrics, handgrip strength (HGS), subjective global assessment and QoL questionnaires (EQ-5D-5L and King’s-Brief Interstitial-Lung-Disease ‘K-BILD’) were collected. Associations between nutritional status and QoL were analysed. Results Ninety participants were recruited and categorised: (1) Idiopathic Pulmonary Fibrosis (IPF) (2) Connective-Tissue Disease associated-ILD (CTD-ILD) or (3) Other (non-IPF/non-CTD ILD). Median age was 66.5 (18) years. Four-percent of patients were underweight and 50% were overweight or obese. Median HGS was 71%-(25.3) of predicted and was correlated to all measures of QoL including EQ-5D health-state index (r = 0.376, p < 0.0001), patient-reported EQ-5D-5L Visual Analogue Score (r = 0.367, p < 0.0001) and K-BILD total score (r = 0.346, p = 0.001). Twenty-three percent of the variance in K-BILD total score (F = 12.888, p < 0.0001) was explained by HGS (ß = 0.273, p = 0.006) and forced vital capacity % predicted (ß = 0.331, p = 0.001). Conclusions Although a small number of ILD patients were malnourished, a large proportion of the cohort were overweight or obese. Handgrip strength was compromised and correlated to QoL. Future research with a larger cohort is required to explore the role of HGS as a predictor of QoL.