Limited information is available regarding the association between workplace psychosocial factors and general mental health status among workers during the coronavirus disease 2019 pandemic. This study examined how working from home affected the association between job demands and psychological distress (PD). A cross-sectional online survey was conducted in December 2020 (N = 27,036). The dependent variable (PD) was assessed using the Kessler Psychological Distress Scale. Job demands were assessed using the Job Content Questionnaire. Working from home was determined by participants’ responses to the question, “Do you currently work from home?” We used a two-level regression analysis adjusted for prefecture. Each individual-level variable at Level 1 was nested into each prefecture at Level 2, stratified by working from home or not. Overall, 21.3% of participants worked from home. The interaction between working from home and job demands was significant. Job demands were positively associated with PD. The stratified analysis indicated that the associations were weaker among employees who worked from home compared with those among employees who did not. The association between job demands and PD may be weakened by working from home.