Background: Despite research that has investigated whether the financial benefits of open employment exceed the costs, there has been scant research as to the effect sheltered and open employment have upon the quality of life of participants. The importance of this research is threefold: it investigates outcomes explicitly in terms of quality of life; the sample size is comparatively large; and it uses an established and validated questionnaire. Method: One hundred and seventeen people with intellectual disability (ID) who were employed in either open or sheltered employment by disability employment agencies were interviewed. Quality of life was assessed using the Quality of Life Questionnaire. After making an initial assessment to see whether the outcomes achieved depended on type of employment, quality of life scores were analyzed controlling for participants' level of functional work ability (assessed via the Functional Assessment Inventory). Results: The results showed that participants placed in open employment reported statistically significant higher quality of life scores. When the sample was split based upon participants' functional work ability, the type of employment had no effect on the reported quality of life for participants with a low functional work ability. However, for those participants with a high functional work ability, those in open employment reported statistically significantly higher quality of life. Conclusions: The results of this study support the placement of people with ID with high functional work ability into open employment. However, a degree of caution needs to be taken in interpreting the results presented given the disparity in income levels between the two types of employment.