Abstract Defect density is an essential software testing and maintenance aspect that determines the quality of software products. It is used as a management factor to distribute limited human resources successfully. The availability of public defect datasets facilitates building defect density prediction models using established static code metrics. Since the data gathered for software modules are often subject to uncertainty, it becomes difficult to deliver accurate and reliable predictions. To alleviate this issue, we propose a new prediction model that integrates gray system theory and fuzzy logic to handle the imprecision in software measurement. We propose a new similarity measure that combines the benefits of fuzzy logic and gray relational analysis. The proposed model was validated against defect density prediction models using public defect datasets. The defect density variable is frequently sparse because of the vast number of none‐defected modules in the datasets. Therefore, we also check our proposed model's performance against the sparsity level. The findings reveal that the developed model surpasses other defect density prediction models over the datasets with high and very high sparsity ratios. The ensemble learning techniques are competitive choices to the proposed model when the sparsity ratio is relatively small. On the other hand, the statistical regression models were the most inadequate methods for such problems and datasets. Finally, the proposed model was evaluated against different degrees of uncertainty using a sensitivity analysis procedure. The results showed that our model behaves stably under different degrees of uncertainty.