More than one billion people worldwide reside in informal settlements, particularly vulnerable to crises such as pandemics. The COVID-19 pandemic significantly impacted the quality of life (QoL) in these communities. This study aimed to assess the effects of the pandemic on the QoL in the informal settlement of Sabzdasht in Iran. With a population of approximately 70,000, Sabzdasht faced challenges during the crisis, including a lack of healthcare infrastructure, increased livelihood instability, and social inequalities. The research employed a mixed-methods approach utilizing structured questionnaires, field data, and statistical analyses. The findings indicate that the pandemic led to a considerable decline in economic, psychological, health, and environmental indicators for residents. In addition to analyzing various aspects of QoL, this study emphasizes the importance of enhancing the resilience of informal settlements. Policy recommendations include strengthening healthcare infrastructure, providing targeted economic support, and encouraging active community participation in urban planning processes. The results of this study can serve as a foundation for designing of effective policies aimed at improving the QoL and reducing vulnerabilities in informal areas in Iran and other developing countries.