Introduction: The establishment of quality improvement groups is a managerial technique that aims to insure the involvement of everyone in the organization. The present study aimed to determine the effect of quality improvement groups' intervention on the efficiency and effectiveness of Lolagar Hospital. Methods: The study was descriptive in nature. The personnel and patients of Lolagar Hospital comprised the study population. A total of 100 patients add 100 staff members were selected by random sampling procedure for the study. The data related to personnel satisfaction was collected using Job Satisfaction Survey (JSS) Questionnaire. Patient satisfaction was measured by a validated questionnaire developed by the Iranian Ministry of Health and Medical Education. The data provided by the Hospital Medical Records Department was used to determine efficiency. The data was analyzed using independent t-tests. Results: T-test showed a decrease in patient satisfaction and personnel job satisfaction (patient satisfaction: from M=3.1-2.7 and personnel job satisfaction from M=3.92-2.92) as a result of the quality improvement groups' intervention. The findings also showed a decrease in bed occupancy rate and patient average length of stay. However, there was an increase in the bed turnover rate. Conclusion: It may be concluded that the intervention of quality improvement groups could have possibly resulted in improving the efficiency and effectiveness of the hospital in the study if the personnel had been properly oriented before the intervention.