Rural cancer survivors report more distress than non-rural survivors. Little research has examined whether rural residence might also be linked to positive psychological outcomes. Rural (n = 117) and non-rural (n = 76) lung cancer survivors completed measures of posttraumatic growth, benefit-finding, and distress. Rural survivors reported more posttraumatic growth than urban survivors. There were no differences in benefit-finding. Mediation analyses indicated distress mediated the relationship between rural residence and posttraumatic growth. Findings suggest rural residence might be beneficial with regard to potential for posttraumatic growth among cancer survivors. Consistent with trauma theory, distress mediated the relationship between rural residence and posttraumatic growth.