Considerable research has found elevated levels of stress and psychological distress among single mothers. However, little research has addressed the relevance of employment for stress processes in this population, and few studies have focused on links between employment, stress, and mental health among single mothers living in rural areas. Based on a probability sample of 508 single mothers age 18-39 living in rural Northern New England, this study: (1) documents variations in chronic stress and psychological distress for employed and unemployed single mothers, (2) considers the extent to which different forms of chronic stress mediate or explain the employment-distress relationship, and (3) examines whether employment status modifies associations between chronic stress and psychological distress. Findings indicated that rural single mothers who were employed reported significantly less financial stress, childcare stress, and rural residence stress, relative to mothers who were not employed, independent of variety of other factors. Employed mothers also experienced significantly less psychological distress which was partially mediating by their lower financial stress. However, there was also a statistical interaction between employment status and financial stress such that the harmful effect of financial stress on well-being was greater for employed women. Implications of the findings are discussed.