The aim of this study was to assess the effect of peloid on pain, functionality, daily life activities, and quality of life of lateral epicondylitis (LE) patients. In this randomized, controlled, single-blind study, 75 patients who were diagnosed with chronic LE were enrolled to the study. Patients were randomized into two groups using the random number table. The patients in the first group (group 1) (n = 33), were given lateral epicondylitis band (LEB) (during the day for 6 weeks) + peloid therapy (five consecutive days a week for 2 weeks), and the second group (group 2) (n = 32), received LEB treatment alone. The patients were assessed by using Patient Rated Tennis Elbow Evaluation (PRTEE) and Nottingham Health Profile (NHP). The data were obtained before treatment (W0), immediately after treatment (W2), and 1 month after treatment (W6). In analysis of the collected data, the Wilcoxon signed rank test for intra-group comparisons and Mann-Whitney U test for comparisons between groups were used. Both in groups 1 and 2, there was a statistically significant improvement in all the evaluation parameters at W2 and W6 when compared to W0 (p < 0.05). In comparison of difference scores between groups, although there was no statistically significant difference between the two groups at W2 when compared to W0 (p > 0.05), a statistically significant difference was found in favor of group 1 for all the evaluation parameters at W6 (p < 0.05). Our results have shown that peloid treatment could be effective in providing improvement in pain relief, function, daily life activities, and quality of life in LE patients.