Patients with gender dysphoria face significant health disparities and barriers to care. Transition-related care includes hormonal therapy, mental healthcare, and gender-affirming surgeries. Studies have described favorable surgical outcomes and patient satisfaction, however, the degree to which these procedures impact mental health conditions is not fully understood. The purpose of this study was to evaluate the effect of gender-affirming plastic surgery on mental health and substance abuse in the transgender population. A national insurance claims-based database was used for data collection. Patients with a diagnosis of gender dysphoria were propensity score-matched for the likelihood of undergoing gender-affirming surgery (no surgery being the control cohort), based on comorbidities, age, and sex. Primary outcomes included post-operative antidepressant use and the prevalence of mental health conditions. A total of 3,134 patients with gender dysphoria were included in each cohort. Patients in the surgery group had overall lower rates of mental health conditions, substance abuse, and SSRI/SNRI use. There was an absolute decrease of 8.8% in SSRI or SNRI prescription after gender-affirming plastic surgery (p<0.001), and significant decreases in post-operative depression (7.7%), anxiety (1.6%), suicidal ideation (5.2%) and attempts (2.3%), alcohol abuse (2.1%), and drug abuse (1.9%). Gender-affirming surgery in appropriately selected gender dysphoric patients is associated with decreased postoperative rates of SSRI or SNRI use and improved mental health.