We aimed to investigate associations between sleep quality with selected quantitative and qualitative parameters of health in older individuals with obesity. Cross-sectional assessment (n = 95 men/women; ≥ 65 years; BMI ≥ 30 kg/m2) of sleep quality, body composition, handgrip strength, quality-of-life, anxiety/depression. Mean PSQI score was 6.3. Poor sleepers (n = 49) presented lower appendicular lean mass (ALM) (16.2 vs 17.8 kg;p= 0.0273), ALM/BMI (0.47 vs 0.53 kg/BMI;p= 0.0085), fat mass (48.6 vs 46.6%;p= 0.0464), handgrip strength (19.7 vs 22.0 kgf;p= 0.0542) and handgrip/BMI (0.57 vs 0.66 kgf/BMI;p= 0.0242) than good sleepers. They also had higher anxiety (8.6 vs 5.6;p= 0.0100) and depression (4.8 vs 3.2;p= 0.0197) scores, worse health-related quality-of-life and lower scores in mental (62.8 vs 73.0;p= 0.0223) and physical (52.9 vs 67.3;p= 0.0015) domains. Adjusted models showed that PSQI was negatively associated with ALM (β = − 0.13, 95% CI − 0.25; − 0.01) and health-related quality of life on physical (β = − 2.76, 95% CI − 3.82; − 1.70) and mental (β = − 2.25, 95% CI − 3.38; − 1.12) domains, and positively associated with anxiety (β = 0.57; 95% CI 0.26; 0.87) and depression (β = 0.31; 95% CI 0.13; 0.49). Poor sleep quality associates with impaired selected quantitative and qualitative parameters of health. Additionally, sleep quality was shown as an independent predictor of ALM, health-related quality-of-life, anxiety and depression in older individuals with obesity.