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Background: Medical residents usually suffer from work overload and experience both personal and professional distress, which affects their level of the empathy to patients. Psychological capital (PsyCap) is a psychological resource that is negatively associated with indicators of distress. Objective: This study explored the potential mediating effect of PsyCap on the relationship between distress and empathy, which may help healthcare professionals in their defense of empathy erosion due to distress. Design: A total of 620 first-year residents were recruited for this cross-sectional survey. Empathy and PsyCap of residents were assessed by the Chinese version of the Jefferson Scale of Physician Empathy and the Psychological Capital Questionnaire, respectively. In this study, both personal and professional aspects contributing to resident distress were investigated by the Satisfaction with Life Scale and an occupational distress scale. T-tests and one-way ANOVA were used to test differences in empathy of residents. Pearson’s correlation was used to examine correlations between distress, PsyCap, and empathy. Structured equation modeling was used to conduct the pathway analysis to test the mediating effect of PsyCap on the association between distress and empathy. Results: 537 residents (86.6%) completed the survey. Distress, empathy, and PsyCap were significantly correlated (P