Research has shown evidence of increased substance use (ISU) in populations affected by mass terrorism; however, less is known regarding how psychosocial factors interact to estimate ISU following such events. To examine which factors are associated with reporting ISU, test whether psychological distress (PD) mediated the association between exposure to trauma and reporting ISU, and whether the mediation effect differed among those with prior mental health (MH) difficulties and those without. A partially representative cross-sectional survey of the adult Jewish population in Israel (aged 18-70 years) was conducted 4 weeks after October 7, 2023 (October 31 to November 5, 2023). A national Web panel using quotas based on national distributions was used. Randomly chosen adult Jewish members were invited to participate until a predetermined sample size was reached. The study measures included reporting ISU (outcome), PD (mediator), exposure to terror events and sociodemographic characteristics (variables), and prior MH difficulties (moderator). Hypotheses regarding outcome and variables were formulated before data collection. A total of 7000 invitations were distributed, 2679 individuals consented, 1432 were excluded owing to quota limits, 74 failed attention tests, and 205 opted out, resulting in 968 participants (490 women [50.6%]; mean [SD] age, 41.5 [14.6] years). Hierarchical regression analysis revealed that participants were significantly more likely to report ISU if they had experienced direct exposure (odds ratio [OR], 5.75; 95% CI, 2.53 to 13.05), indirect exposure (OR, 1.84; 95% CI, 1.27 to 2.67), media exposure (OR, 1.22; 95% CI, 1.09 to 1.36), PD (OR, 1.80; 95% CI, 1.44 to 2.25), or previous MH difficulties (OR, 2.76; 95% CI, 1.86 to 4.09). PD partially mediated the association between indirect exposure (b = 0.20; 95% CI, 0.11 to 0.31) and media exposure (b = 0.14; 95% CI, 0.10 to 0.19) and reporting ISU. No evidence was found to support previous MH difficulties as a moderator of these indirect effects (indirect exposure, b = -0.003; 95% CI, -0.28 to 0.28; media exposure, b = 0.01; 95% CI, -0.06 to 0.08). This study contributes to the research on the association of mass terrorism with ISU while shedding important light on the role it may play in the self-medication of PD following exposure, even in those who might have no previous MH difficulties. These insights are crucial for planning essential health services and preventive measures.