Psychosocial risk assessments are frequently applied with an a priori classification of favorable and unfavorable working conditions. However, such classifications contradict transactional stress theory and the results of research that found the effects of work stressors on wellbeing to be dependent on boundary conditions. The challenge/hindrance framework assumes that the effects of stressors on wellbeing depend on their individual appraisal as either challenge (stressors associated with personal gain) or hindrance (stressors associated with constraints). We took a heterogeneous sample of 631 employees and, by taking into account their individual appraisals as challenge or hindrance, studied associations between exposure to working conditions covered by a frequently used psychosocial risk assessment and health outcomes. Our findings confirmed substantial variations of appraisal and confirmed that challenge and hindrance evaluations of exposures to working conditions are not mutually exclusive. Whereas exposure to working conditions was only partly associated with health outcomes, all challenge appraisals were positively related and all hindrance appraisals negatively related with favorable health outcomes. When adjusted for challenge and hindrance appraisal, direct effects on health outcomes were not significant for most of the considered working conditions. Health effects of working conditions were partly mediated by challenge/hindrance appraisals, and appraisal explained more variance in health outcomes than information about exposure to these conditions. Nevertheless, negative health effects were observed for some working conditions (time pressure, qualitative demands, responsibility, and interruptions), even when controlled for employees’ evaluations. We conclude that measures of challenge/hindrance appraisals should be included in occupational risk assessments.