It was estimated that over 260,000 children are living with Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome (HIV/AIDS) while close to 2 million are directly or indirectly affected by the disease in Nigeria. Improvements in treatments for infected children have been documented in the literature but there is gross knowledge gap on the impact of HIV/AIDS on the quality of life and psychosocial functioning (PSF) of affected children in Nigeria. We comparatively explored the association of quality of life with PSF and other factors among adolescents in families affected by HIV/AIDS (FAHA) and in families not affected by HIV/AIDS (FNAHA). Data were extracted for 960 adolescents from a State wide cross-sectional study in which participants were selected through multistage sampling techniques. Data were collected using questionnaires consisting of demographic information, adapted World Health Organization Quality of Life-BREF and the strength & difficulty questionnaire (SDQ). The quality of life scores were categorized into poor, moderate, and high based on the amount of standard deviation away from the mean while the SDQ scores were categorized into normal, borderline, and abnormal based on the SDQ scoring systems. The chi-square test and the independent t-test were used for bivariate analyses while the logistic regression was used for multivariate analyses at the 5% level of significance. The proportion with poor quality of life (27.0%) was significantly higher among adolescents in FAHA than in FNAHA (p = 0.0001). Adolescents in FAHA (OR:2.32; 95%CI:1.67-4.09) were twice more likely to have poor quality of life than those in FNAHA. In FAHA, adolescents on the borderline of PSF (OR:2.19; 95%CI:1.23-3.89) were twice more likely to have poor quality of life than those with normal PSF. Adolescents in FAHA have poor quality of life than those in FNAHA and also face additional burden of psychosocial dysfunctions. Interventions focusing on functional social support and economic empowerment will benefit adolescents in FAHA in the studied location.