Abstract Background Health-related quality of life (HRQoL) is an important outcome indicator for chronic diseases. This study aimed to develop a new instrument for assessment of HRQoL in chronic heart failure (CHF) and evaluate its psychometric properties. Methods This study included two steps of conceptualization and item generation, and assessment of the psychometric properties of an instrument for measuring HRQoL in patients with CHF. Content validity, exploratory and confirmatory factor analyses, concurrent validity, convergent validity, known groups comparison were performed to assess construct validity. Internal consistency, and stability were estimated by the Cronbach’s alpha and intraclass correlation coefficients. Results The content validity of the developed chronic heart failure quality of life questionnaire (CHFQOLQ-20) was assessed by 10 experts. The exploratory and confirmatory factor analyses yielded and confirmed four factors with 20 items. The concurrent and convergent validity of the CHFQOLQ-20 were established using the Short Form Health Survey (SF-36), and the MacNew Heart Disease Quality of Life Questionnaire, respectively. The known-groups validity as assessed by using the New York Heart Association (NYHA) functional classification., showed that the questionnaire discriminated well between patients who differed in functional classification. The internal consistency and test-retest reliability of the CHFQOLQ-20 were satisfactory, with a Cronbach’s alpha and intraclass correlation coefficient (ICC) values of 0.93 and 0.84, respectively. Conclusion The results confirmed that CHFQOLQ-20 is a valid and reliable measure of quality of life (QoL) in patients with CHF. It is a short and easy-to-use instrument that is also capable of assessing the cognitive function, which has been overlooked in previous questionnaires.