Introduction: The impact of medical student psychological distress on academic performance has not been systematically examined. This study provided an opportunity to closely examine the potential impacts of workplace and study related stress factors on student’s psychological distress and their academic performance during their first clinical year. Methods: This one-year prospective cohort study was performed at a tertiary hospital based medical school in Melbourne, Australia. Students completed a questionnaire at three time points during the year. The questionnaire included the validated Kessler psychological distress scale (K10) and the General Health Questionnaire-28 (GHQ-28), as well as items about sources of workplace stress. Academic outcome scores were aggregated and correlated with questionnaire results. Results: One hundred and twenty six students participated; 126 (94.7%), 102 (76.7%), and 99 (74.4%) at time points one, two, and three, respectively. 33.1% reported psychological distress at time point one, increasing to 47.4% at time point three. There was no correlation between the K10 scores and academic performance. There was weak negative correlation between the GHQ-28 at time point three and academic performance. Keeping up to date with knowledge, need to do well and fear of negative feedback were the most common workplace stress factors. Conclusions: Poor correlation was noted between psychological distress and academic performance.