BACKGROUND Obesity is a major health concern for adolescents, with one in four being overweight or obese in Australia. The purpose of this study was to examine the moderation effect of parental encouragement of healthy behaviors on the relationship between adolescent weight status and Health-Related Quality of Life (HRQoL). METHODS Baseline data were collected from 3,040 adolescents participating in the It's Your Move project, conducted in the Barwon South-West region of Victoria, in 2005. The Paediatric Quality of Life Inventory was used to measure HRQoL, and parental encouragement was derived from purposely designed self-report items. Weight status was calculated according to World Health Organization growth standards from measured weight and height. Linear regression analyses modeled direct relationships and interaction terms. Analyses were adjusted for age, sex, physical activity level, nutrition and school attended. RESULTS Higher levels of parental encouragement, as compared to low encouragement, were positively associated with higher global HRQoL scores, particularly in the physical functioning domain. To a lesser degree, high parental encouragement was also associated with higher scores on the psychosocial domain. Obese weight status showed a significant association with lower HRQoL on all scales. Parental encouragement significantly moderated the inverse relationship between overweight status and physical wellbeing. CONCLUSIONS Findings suggest that parental encouragement of healthy behavior is associated with increased HRQoL scores for adolescents. Whilst more research is needed to validate the significant interaction effect, main effects suggest that parental encouragement of healthy behavior is an important factor in adolescent wellbeing and should be considered when developing prevention and clinical interventions for obesity.