Objective While several theoretical models provide explanation for the genesis and development of post‐traumatic growth (PTG) in the aftermath of stressful events, empirical evidence regarding the predictors and consequences of PTG in breast cancer patients in active treatment and early survivorship is inconclusive. This study, therefore, examines the role of distress and stress as predictors and outcomes of PTG in women with breast cancer over an 18‐month period. Methods These effects are tested in two structural equation models that track pathways of PTG in a sample of 253 recently diagnosed women. Questionnaires were completed at diagnosis and at 4 follow‐up time points assessing cancer‐specific stress (Impact of Events Scale), global stress (Perceived Stress Scale), and depression and anxiety (Hospital Anxiety and Depression Scale). Post‐traumatic growth (Silver Lining Questionnaire) was assessed at follow‐up time points. Results Cancer‐specific stress was related to higher PTG concurrently and longitudinally. Anxiety was related concurrently to higher PTG, but overall general distress had minimal impact on PTG. Global stress was inversely related to PTG. Positive growth at 6 months was associated with subsequent reduction in stress. Conclusions This study showing that early stage higher cancer‐specific stress and anxiety were related to positive growth supports the idea that struggle with a challenging illness may be instrumental in facilitating PTG, and findings show positive implications of PTG for subsequent adjustment.