Background and objectives In older people with kidney failure, improving health-related quality of life is often more important than solely prolonging life. However, little is known about the effect of dialysis initiation on health-related quality of life in older patients. Therefore, we investigated the evolution of health-related quality of life before and after starting dialysis in older patients with kidney failure. Design, setting, participants, & measurements The European Quality study is an ongoing prospective, multicenter study in patients aged ≥65 years with an incident eGFR ≤20 ml/min per 1.73 m². Between April 2012 and December 2021, health-related quality of life was assessed every 3–6 months using the 36-item Short-Form Health Survey (SF-36), providing a mental component summary (MCS) and a physical component summary (PCS). Scores range from zero to 100, with higher scores indicating better health-related quality of life. With linear mixed models, we explored the course of health-related quality of life during the year preceding and following dialysis initiation. Results In total, 457 patients starting dialysis were included who filled out at least one SF-36 during follow-up. At dialysis initiation, mean ± SD age was 76±6 years, eGFR was 8±3 ml/min per 1.73 m², 75% were men, 9% smoked, 45% had diabetes, and 46% had cardiovascular disease. Median (interquartile range) MCS was 53 (38–73), and median PCS was 39 (27–58). During the year preceding dialysis, estimated mean change in MCS was −13 (95% confidence interval, −17 to −9), and in PCS, it was −11 (95% confidence interval, −15 to −7). In the year following dialysis, estimated mean change in MCS was +2 (95% confidence interval, −7 to +11), and in PCS, it was −2 (95% confidence interval, −11 to +7). Health-related quality-of-life patterns were similar for most mental (mental health, role emotional, social functioning, vitality) and physical domains (physical functioning, bodily pain, role physical). Conclusions Patients experienced a clinically relevant decline of both mental and physical health-related quality of life before dialysis initiation, which stabilized thereafter. These results may help inform older patients with kidney failure who decided to start dialysis.