Background: Health-related quality of life (HRQL) in interstitial lung disease (ILD) patients is impaired. We aimed to identify baseline predictors for HRQL decline within a 12-month observation period. Methods: We analyzed 194 ILD patients from two German ILD-centers in the observational HILDA study. We employed the disease-specific King’s Brief Interstitial Lung Disease questionnaire (K-BILD) with the subdomains ‘psychological impact’, ‘chest symptoms’ and ‘breathlessness and activities’, and the generic EQ-5D Visual Analog Scale (VAS). We evaluated how many patients experienced a clinically meaningful decline in HRQL. Subsequently, we investigated medical and sociodemographic factors as potential predictors of HRQL deterioration. Results: Within the study population (34.0% male, Ø age 61.7) mean HRQL scores hardly changed between baseline and follow up (K-BILD: 52.8 vs. 52.5 | VAS: 60.0 vs. 57.3). On the intra-individual level, 30.4% (n = 59) experienced a clinically relevant deterioration in K-BILD total score and 35.4% (n = 68) in VAS. Lower baseline forced vital capacity % predicted determined HRQL decline in K-BILD total score (ß– coefficient -0.02, p = 0.007), VAS (ß–coefficient -0.03, p < 0.0001), and in the subdomain ‘psychological impact’ (ß– coefficient -0.02, p = 0.014). Lower baseline diffusing capacity of carbon monoxide % predicted determined deterioration in ‘breathlessness and activities’ (ß– coefficient -0.04, p = 0.003) and ‘chest symptoms’ (ß– coefficient -0.04, p = 0.002). Additionally, increasing age predicted decline in ‘psychological impact’ (ß–coefficient 0.06, p < 0.007). Conclusion: Around a third of ILD patients experienced a clinically relevant HRQL deterioration in a 12-month period, which is consistently associated with baseline lung function values. As lung function values are time-dependent variables with possible improvements, it, thus, seems important to diagnose ILD early in order to maintain HRQL on the possibly highest level.