Purpose: Quality of Life (QoL) of insulin-naïve people with type 2 diabetes mellitus (T2DM) improves after transition to insulin. Little is known about the role of hypoglycaemia in this context. Secondary analyses of the Study of the Psychological Impact in Real care of Initiating insulin glargine Treatment (SPIRIT) aimed to investigate the relationship between hypoglycaemia and QoL when transitioning to insulin. Methods: Insulin-naïve Dutch people with T2DM in suboptimal glycaemic control (HbA1c >53 mmol/mol; 7.0%) on maximum dose of oral glucose-lowering medications were included from 363 primary care practices (n = 911). Participants started insulin glargine and completed QoL-questionnaires (WHO-5 Well-being Index (WHO-5; emotional well-being), Hypoglycaemia Fear Survey-worry scale (HFS-w; hypoglycaemia fear) and Diabetes Symptom Checklist-revised (DSC-r; diabetes symptom distress) at baseline, 3 and 6 months follow-up. Linear GEE analyses were used to investigate the association between symptomatic, nocturnal, severe hypoglycaemia (number of episodes during 3 months prior to visit) and QoL over time. Results: 52.5% men participated, mean age 62.2 years (SD ± 10.92), and median HbA1c 67 mmol/mol (range 61–77) (8.3%). More symptomatic hypoglycaemic episodes were associated with higher HFS-w and DSC-r scores (P < 0.01). Experiencing multiple nocturnal or severe episodes was related to higher symptom distress as well, when compared to no episodes. These associations did not change significantly over time. Conclusions: Hypoglycaemia is associated with lower QoL in terms of hypoglycaemia fear and diabetes symptom distress. The transition to insulin does not affect this relationship, suggesting hypoglycaemia in itself has a detrimental effect on diabetes-related QoL independent of treatment regimen.