This study examined the associations of objectively assessed physical features of the neighbourhood environment with physical and mental aspects of health-related quality of life (HRQoL) as measured by the SF-36, and the roles of physical activity and sedentary behaviour in these associations. We used data from a national sample of Australian mid-aged and older adults living in urban areas (N = 4141). Environmental attributes were computed for 1-km-radius areas surrounding participants' residential addresses. Neighbourhood socio-economic status (SES) and average annual concentrations of PM2.5 were the only attributes related to HRQoL in the expected direction in the total- and direct-effect regression models. All other environmental attributes were related to HRQoL via physical activity behaviours and leisure-time sitting. The associations of most environmental features with HRQoL mediated by physical activity and sedentary behaviours were inconsistent, positive through some pathways and negative through others. This study suggests that neighbourhood SES may in part benefit HRQoL by helping promote an active lifestyle. Neighbourhood attributes defining walkability may benefit HRQoL by providing opportunities for walking and resistance training and, through these, by helping reduce leisure-time sitting. However, the same attributes also may limit opportunities for household activities and gardening and negatively impact on HRQoL through these pathways.