OBJECTIVE - The aim of this study was to explain adjustment (diabetes-related quality of life, general well-being, and psychopathology) in adolescents with type 1 diabetes by testing the direct, mediating, and moderating effects of diabetes-specific and psychosocial factors, using an adapted version of the Disability-Stress-Coping model of Wallander and Varni. RESEARCH DESIGN AND METHODS - A total of 437 adolescents (54.5% girls; age range 11-19 years) with type 1 diabetes (mean ± SD diabetes duration 6.13 ± 3.78 years) were recruited from 25 hospitals in the Netherlands. Questionnaires were completed by the adolescents and their family members. Metabolic control was assessed by measuring A1C in all participants in one laboratory. RESULTS - Diabetes stress mediated between A1C and adjustment, after controlling for protective factors, and explained an additional 16% variance in quality of life and a 15% variance in general well-being, whereas a 19% additional variance in psychopathology was explained by both diabetes-related and general stress. No moderating effects were identified after controlling for the main effects of all risk and protective factors in the model. CONCLUSIONS - Both diabetes-related and general stress are critical predictors of the adjustment of adolescents with type 1 diabetes. Protective factors such as self-worth and social support may mediate the effects of generic stress and thus should be encouraged. Diabetes-related stress has the potential to displace the effects of protective factors and thus may play a critical role in the development of maladjustment in adolescents with type 1 diabetes. © 2009 by the American Diabetes Association.