Chronic widespread pain (CWP) is associated with poor health-related quality of life (HRQoL). It is unclear whether pain itself is the cause of poor HRQoL or other factors play a role. We hypothesised that new onset of CWP was associated with poor physical and mental HRQoL but that psychosocial risk markers for CWP onset would explain this relationship. A prospective population-based survey measured pain and psychosocial status at baseline. Subjects free of CWP at baseline were followed up 15 months later, when pain status, threatening life events and HRQoL (SF-12) were assessed. The risk associated with the new onset of CWP and reporting poor SF12-MCS and SF12-PCS was quantified using multinomial logistic regression (relative risk ratios (RRRs) with 95% confidence intervals (95% CI)), adjusted for age and gender. 3000 subjects (77%) free of CWP at baseline participated at follow-up. 2650 subjects (88%) provided full SF-12 and pain data and formed the cohort for this analysis. 9.4% of subjects (n = 248) reported new CWP. New CWP was associated with an increased risk of having the poorest SF12-MCS (RRR = 2.3; 95% CI 1.6–3.2) and SF12-PCS (RRR = 8.0; 95% CI 5.4–11.8) scores. After adjusting for baseline psychosocial status, the relationship between CWP onset and SF12-MCS was attenuated (RRR = 1.2; 95% CI 0.8–1.8), although the association with SF12-PCS remained (RRR = 4.8% CI 3.1–7.47). New onset of CWP is associated with poor mental and physical HRQoL. However, the relationship with mental HRQoL is explained by psychosocial risk markers.