This study examined prospective reciprocity between psychological distress and subjective well-being and the role of change in psychosocial resources in the reciprocity in the year following cancer diagnosis. Psychological distress (Hospital Anxiety and Depression Scale), subjective well-being (Chinese Affect Scale and Satisfaction with Life Scale), and psychosocial resources of 180 Chinese patients were assessed at diagnosis (Time 1) and at 3-month (Time 2) and 12-month (Time 3) follow-up. Cross-lagged panel analysis demonstrated significant cross-lagged effects between psychological distress and subjective well-being. Time 2 to Time 3 change in perceived collective control (i.e., control over cancer in collaboration with close social partners) significantly mediated the cross-lagged effect of Time 2 well-being on Time 3 distress, and the mediating effect was stronger at medium or higher Time 2 distress. The findings suggest that whereas distress and well-being reciprocally predict each other throughout cancer adaptation, change in perceived collective control could mediate the prospective relationship of well-being with subsequent distress.