We assessed factors contributing to ethnic and racial disparities in mental health quality of life (MHQOL) among lesbian, gay, and bisexual (LGB) midlife and older adults. We utilized cross-sectional survey data from a sample of non-Hispanic White and Hispanic LGB adults aged 50 and older. Structural equation modeling was used to test the indirect effect of ethnicity/race on MHQOL via explanatory factors including social connectedness, lifetime discrimination, socioeconomic status (SES), and perceived stress. Hispanics reported significantly lower levels of MHQOL, compared to non-Hispanic Whites. In the final model, the association between ethnicity/race and MHQOL was explained by higher levels of perceived stress related to lower SES, higher frequency of lifetime discrimination, and lack of social connectedness among Hispanic LGB adults. This study suggests that perceived stress related to social disadvantage and marginalization plays an important role in MHQOL disparities among Hispanic LGB midlife and older adults.