The current study was carried out to investigate the association of school-relatedrnstress and psychological capital with academic achievement and behavior problemsrnin students with health impairements as well as the the possible moderating influencernof psychological capital in the school-related stress and outcomes relationships. Inrnaddition, the study examined differences in school-related stress, psychologicalrncapital, academic achievement and behavioral problems between students with andrnwithout health impairments. The study involved 233 students with health impairmentsrnand 250 students without health impairements in Addis Ababa. Instruments used forrnthe study include the Demographic Questionnaire, Perceived School-Related StressrnScale, Psychological Capital Questionnaire, Strengths and Difficulties Questionnairernand school record reviews.rnDescriptive statistics, structural equation modeling,rnmulti-group structural equation modeling, one-way MANOVA and independentrnsamples t-test were utilized to anlyze the data. Results revealed that school-relatedrnstress was significantly and negatively associated with academic achievement andrnpositively with behavior problems. Psycholgical capital was significantly andrnpositively associated with academic achievement and negatively with behaviorrnproblems. Higher levels of psychological capital had a significant moderating role inrnthe relationships between school related stress and both outcomes of academicrnachievement and behavior problems. The results also indicated that students withrnhealth impairments had higher school-related stress, lower psychological capital,rnlesser academic achievement and greater behavior problems compared to studentsrnwithout health impairments. Conclusions, implications and directions for futurernresearch are provided