Gratitude has been consistently linked to well-being, but its influence on health-related functioning is not well understood. Furthermore, research suggests the need to differentiate between-person and within-person effects of personality characteristics, and research on gratitude and health has not typically done so. This prospective study aimed to (1) differentiate the unique effects of trait and state gratitude on health-related quality of life (HRQoL) and (2) test state gratitude as a mediator between baseline trait gratitude and subsequent HRQoL. Undergraduate participants ( N = 141) completed a trait gratitude measure at baseline and then repeated measures of weekly state gratitude and HRQoL over eight weeks. Multilevel models examined baseline trait gratitude, state gratitude averaged across the study (person aggregate) as between-person individual differences, and within-person variability in state gratitude (person-centered) as predictors of HRQoL, as well as the indirect effect of trait gratitude on HRQoL via state gratitude. Greater aggregate and person-centered state gratitude each predicted higher HRQoL. Baseline trait gratitude did not have a significant direct effect but prospectively predicted higher HRQoL via higher weekly state gratitude. Results suggest that understanding effects of gratitude on health-related perceptions requires accounting for both between-person individual differences and within-person fluctuation in state gratitude.