Introduction: In recent years, the increase in educational attainment and economic recession has led to the growth of perceived overqualification among employees; a condition in which individuals believe that their abilities, education, and skills exceed the requirements of their current job. This situation brings various negative individual and organizational consequences, including increased stress, emotional exhaustion, and reduced job and life satisfaction.

Objective: This study aimed to examine the mediating role of perceived person-environment fit in the relationship between perceived overqualification and employees’ psychological and behavioral outcomes, including stress, emotional exhaustion, job satisfaction, and life satisfaction.

Method: This descriptive-correlational study collected data through standardized questionnaires from 358 employees working in organizations based in Tehran. The data were analyzed using path analysis.

Findings: The results indicated that perceived overqualification is significantly associated with stress, emotional exhaustion, job satisfaction, and life satisfaction. Furthermore, perceived person-environment fit plays a mediating role in these relationships.

Conclusion: Overall, enhancing person–environment fit can mitigate the negative effects of perceived overqualification. Paying attention to employees’ perceptions of fit with their work environment can be an effective strategy for improving their psychological well-being and satisfaction.