Objectives: This study validated the Japanese version of O’Donovan et al.’s (2020) composite measure of the psychological safety scale and examined the associations of psychological safety with mental health and job-related outcomes. Methods: Online surveys were administered twice to Japanese employees in teams of more than three members. Internal consistency and test–retest reliability were tested using Cronbach’s α and intra-class correlation coefficient (ICC), respectively. Structural validity was examined using confirmatory factor analysis (CFA) and exploratory factor analysis (EFA). Convergent validity was tested using Pearson’s correlation coefficients. Multiple linear regression analyses were conducted to examine the relationship between psychological safety and psychological distress, work engagement, job performance, and job satisfaction. Results: Two hundred healthcare workers and 200 non-healthcare workers were analyzed. Internal consistency, test–retest reliability, and convergent validity were acceptable. CFA demonstrated poor fit, and EFA yielded a two-factor structure, with team leader as one factor and peers and team forming the second factor. The total score showed significant and expected associations with all outcomes in the adjusted model for all workers. Conclusions: The Japanese version of the measure of the psychological safety scale presented good reliability and validity. Psychological safety is important for employees’ mental health and performance.