Aims: The negative effect of the COVID-19 pandemic on sleep quality of clinically stable psychiatric patients is unknown. This study examined the prevalence of sleep disturbances and their association with quality of life (QOL) in clinically stable older psychiatric patients during the COVID-19 pandemic. Methods: This multicenter, cross-sectional study involved older patients attending maintenance treatment at outpatient departments of four major psychiatric hospitals in China. Patients’ socio-demographic and clinical characteristics were collected. Sleep disturbances, depressive symptoms, and QOL were assessed with the Insomnia Severity Index, the 9-item Patient Health Questionnaire, and 2 items of the World Health Organization Quality of Life-Brief version, respectively. Binary logistic regression analysis was conducted to examine the independent associations of socio-demographic and clinical variables with sleep disturbances, while the association between sleep disturbances and QOL was explored with analysis of covariance. Results: A total of 941 patients were recruited. The prevalence of sleep disturbances was 57.1% (95% CI: 53.9–60.2%). Analysis of covariance revealed that QOL was significantly lower in patients with sleep disturbances compared to those without. Multivariate logistic regression analysis showed that sleep disturbances were positively and independently associated with more severe depressive symptoms (OR = 1.32, 95% CI: 1.26–1.37). Compared to patients with major depressive disorder, those with other psychiatric diagnoses had a significantly higher prevalence of sleep disturbances (OR = 1.44, 95% CI: 1.00–2.08). Conclusion: Sleep disturbances were common among clinically stable older psychiatric patients during the COVID-19 pandemic. Considering the negative association with QOL, this subpopulation needs regular assessment and timely treatment to reduce their sleep disturbances and improve their QOL.