The purpose of this study is to examine the major determinants of psychological health during unemployment. With this in mind, 438 (17% female and 83% male) unemployed individuals were contacted through Turkey's State Employment Office. It was expected that the relationship between duration of unemployment and psychological wellbeing would be nonlinear. Additionally it was hypothesized that perceived social support would moderate the relationship between length of unemployment and psychological health. Further, we suggested that self-esteem would be related to psychological health and moderate the relationship between length of unemployment and psychological health. The results supported the curvilinearity hypothesis of the relationship between unemployment duration and psychological health as measured by General Health Questionnaire. However, social support was not found to moderate the relationship between unemployment duration and psychological health. The hypothesis that self-esteem would moderate the relationship between length of unemployment and psychological distress was not supported, although self-esteem was a strong negative determinant of psychological distress during unemployment. Regression analysis showed that the best predictors of psychological health were self-esteem, perceived social support and perceived adequacy of financial aid received from relatives. Interestingly, perceived adequacy of the financial aid was negatively related to psychological health. This result was contradictory with the previous literature pointing out that financial aid reduces the effects of poverty due to unemployment. The findings of this study are important since the relationship between unemployment duration and psychological health was nonlinear, indicating that relevant services should be especially careful to intervene to increase social support and self-esteem during these critical times. The other results and limitations are discussed.