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Aims: Psychological distress is a global public health concern with individual and societal implications causing work-related disability and loss of productivity. It is less known how much work ability contributes to the development of psychological distress. This study aimed to assess the association between self-perceived physical and mental work ability in relation to job demands, and the incidence of psychological distress in a Swedish working population. Methods: Data were obtained from three subsamples of the Stockholm Public Health Cohort with baseline in 2010 and follow-up in 2014, based on a working population in Stockholm County aged 18-60 years, with no or mild psychological distress at baseline (n=29,882). Self-perceived physical and mental work ability in relation to job demands were assessed at baseline with a subscale from the Work Ability Index. Study participants scoring 4 or more on the General Health Questionnaire 12 at follow-up were classified as having developed psychological distress during the study period. Poisson log linear regression was used to calculate crude and adjusted rate ratios with 95% confidence intervals. Results: At follow-up, 2543 participants (12%) had developed psychological distress. Reporting poor physical and/or poor mental work ability in relation to job demands at baseline was associated with an almost doubled rate ratio of psychological distress at follow-up, compared to reporting good work ability (rate ratio 1.8; 95% confidence interval 1.6-2.0). Conclusions: Poor work ability is associated with a higher incidence of future psychological distress compared to good work ability.