The study of 322 patients in rural New Hampshire and Vermont also suggests the counseling didn't discourage people from going to the hospital. The research didn't look at costs.
The study's publication in Wednesday's Journal of the American Medical Association coincides with the fight over health care overhaul proposals in Congress.
Some conservatives have called end-of-life counseling included in one version of the bill "death panels" and a step toward euthanasia. A House proposal allows Medicare to pay doctors to chat with patients, if they desire it, about living wills, hospice and appointing a trusted person to make decisions when the patient is incapacitated.
President Barack Obama called the euthanasia charge "simply dishonest." Health and Human Services Secretary Kathleen Sebelius has said the end-of-life proposal is likely to be dropped from the final bill.
In the new study, trained nurses did the end-of-life counseling, mostly by phone, with patients and family caregivers using a model based on national guidelines.
All the patients in the study had been diagnosed with terminal cancer. Half were assigned to receive usual care. The other half received usual care plus counseling about managing symptoms, communicating with health care providers and finding hospice care.
Patients and their caregivers also could attend monthly 90-minute group meetings with a doctor and a nurse to ask questions and discuss problems in what's called a "shared medical appointment."
Patients who got the counseling scored higher on quality of life and mood measures than patients who did not.
On the quality of life scale, patients could score up to 184 points. The groups were about 10 points apart in the last assessment before they died. On the mood scale, patients could score up to 60 points and the groups were about 5 points apart.
The patients who got the counseling also lived longer, by more than five months on average, but that finding didn't reach a statistical level of significance.
Patients getting such counseling often thank the nurses helping them, said lead author Marie Bakitas, a researcher and nurse practitioner at Dartmouth Hitchcock Medical Center in Lebanon, N.H.
"They seem to feel a whole lot better knowing there's someone who's looking at the rest of them and not just the tumor," Bakitas said.
In both groups, hospital stays were rare: six to seven days on average during the patients' last year of life. Betty Ferrell of City of Hope Medical Center in Duarte, Calif., who has done similar research but wasn't involved in the new study, said that's not surprising.
"It's patients and families in their own living rooms who are dealing with end-of-life care," Ferrell said. "They're not in the hospital. They're at home."
Ferrell, who leads a guidelines panel on end-of-life care, praised the study, which was funded by the National Cancer Institute, and said she hoped it would clear up misconceptions.
"This is about helping people live with the diagnosis the doctor has given," Ferrell said. "This study reflects on what kind of support do people deserve when they're dying."