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Aims: The goal of this study is to assess the relationship between quality of life (QoL), neuropsychiatric symptoms (NPS), psychotropic drug use (PDU) and patient characteristics in a large group of nursing home residents with dementia. Methods: This cross-sectional observational study included 288 individuals with dementia who reside in 14 special care units in 9 nursing homes. The following measures were used: the Qualidem scale to assess QoL, the Neuropsychiatric Inventory-Nursing Home version, the Global Deterioration Scale (GDS), the Severe Impairment Battery-short version, an Activities of Daily Living scale and PDU. Associations between QoL and NPS were examined using multivariate linear regression models with corrections for potential covariates. Results: The average age of the residents was 84 years (SD = ±7). Agitation, depression, psychosis, psychomotor agitation and psychotropic drugs were independently associated with poor QoL. In patients with mild to moderately severe dementia (GDS 4–6), NPS, PDU and cognitive impairment explained almost half of the variance in QoL scores. Agitation and depression were particularly strong predictors of poor QoL. In patients with severe dementia (GDS 7), agitation, depression, psychosis and cognitive impairment were associated with poor QoL. Conclusions: NPS, cognition and PDU independently impair QoL for patients in both the moderate and advanced stages of dementia. These results challenge existing pharmacological intervention strategies and highlight the need for psychosocial interventions in the treatment of NPS.