We conceptualize that psychosocial safety climate (PSC) has a positive effect on employees' safety behavior by reducing their psychological distress. A high-level PSC environment reduces psychological distress by eliminating the employees' need for devoting psychological resources toward safety concerns. This preserves psychological resources to be invested in important behaviors i.e., safety compliance and participation. Data were collected from 190 production workers in the oil and gas industry across three states of Malaysia. Results showed strong support for our hypotheses. PSC was negatively linked with psychological distress. Psychological distress predicted safety compliance and participation and mediated the relationship between PSC and safety compliance/participation. Results suggest that in order to improve safety compliance and participation, management in safety-sensitive industries should pay attention to psychosocial factors in the work environment. The implications of these results for safety interventions and further research are discussed.