Health Related Quality of Life (HRQL) is viewed as an important health outcomes indicator, particularly for decision-making. Well-established high psychometric properties of HRQL instruments are key in their selection for research purposes. OBJECTIVES: This study determined the psychometric properties of the HRQL instrument used in the Medical Expenditure Panel Survey (MEPS) and offered recommendations about its use. METHODS: The psychometric properties investigated were reliability (internal consistency) and validity (content, construct, and known groups). Content validity was estimated by comparison with established HRQL instruments e.g. SF-36 and others. Construct validity was estimated by factor analysis using the principal components method and internal consistency was established using Cronbach's alpha. Known groups validity of the HRQL scores was estimated by one-way analysis of variance (ANOVA) and post hoc Tukey's HSD using age groups and perceived general health status as the independent variables. RESULTS: The HC-005 measures four of the most frequently represented health concepts (physical functioning, social functioning, role functioning and health perceptions). The factor analysis indicated that the instrument measured two underlying constructs - Physical Functioning and Activities of Daily Living (ADL). The instrument had a high overall internal consistency (0.85). The Physical Functioning and ADL scales had high (0.87) and good (0.67) internal consistency respectively. The scales scores did not show any floor and ceiling effects. ANOVA indicated that the scales were able differentiate between age groups and perceived general health responses. CONCLUSIONS: The MEPS HRQL instrument has a reasonably good design and broad scales that capture HRQL domains such as Physical Functioning and ADL's. The findings demonstrate good to average psychometric profiles for this instrument. There is still further need to establish the psychometric properties of this instrument for health care decision making.