Recent research on reported work stress indicates stress may not always be deleterious for an individual or organization. Research in this area, however, has not yet examined a variety of work outcomes, the mechanism by which stress leads to such outcomes, and the moderators of this effect. The present study hypothesized that two types of reported stress (challenge- and hindrance-related) have a divergent relationship with work outcomes (relating to desirable and undesirable outcomes, respectively) and a similar (positive) relationship with psychological strain. We also hypothesize felt challenge as a mechanism through which challenge stress relates to desirable outcomes and job control as a moderator of the effect. Results from a heterogeneous sample of university staff employees (N=461) supported many of the hypotheses. The two types of stress differentially related to work outcomes yet both positively related to psychological strain. In addition, felt challenge mediated the relationship between challenge-related stress and work outcomes, yet the effect of challenge-related stress did not depend on job control.