The aim of this study was to evaluate whether psychological distress modifies the effect of continuous glucose monitoring (CGM) in patients with type 1 diabetes (T1D) and impaired awareness of hypoglycemia. Fifty-two patients with T1D and impaired awareness of hypoglycemia participated in an earlier reported randomized crossover trial with two 16-week intervention periods comparing CGM with self-monitoring of blood glucose (SMBG). During the CGM phase, time spent in euglycemia (4-10 mmol/L), the primary outcome, was 9.6% higher compared with the SMBG phase (P < 0.0001). Psychological distress was operationalized as low emotional well-being (World Health Organization Well-being Index 5 [WHO-5] < 50) high diabetes-related distress (Problem Areas in Diabetes 5 [PAID-5] ≥ 8) and/or high fear of hypoglycemia (Hypoglycemia Fear Survey [HFS] Worry > mean HFS Worry score +1 standard deviation). Modifying effects were assessed by analyzing psychological distress score × intervention - interaction effects. Results showed that both the low emotional well-being group and normal emotional well-being group had equal glycemic outcomes during the CGM phase. High diabetes distress and elevated fear of hypoglycemia did not result in significant interaction effects for glycemic outcomes. This study demonstrated that CGM is equally effective in terms of glycemic improvements in high versus low distressed patients with T1D and impaired awareness of hypoglycemia.