Background <p>Living with diabetes presents psychosocial challenges, including distress, burnout, and depressive symptoms. Peer-created digital storytelling (DST) videos offer a platform for sharing personal experiences and management strategies, potentially improving psychological well-being and supporting better diabetes management. DST, grounded in Narrative and Social Cognitive Theory, provides an innovative, culturally adaptable, and low-cost intervention that addresses limitations of conventional psychosocial approaches. This study aimed to evaluate the effectiveness of DST in improving psychological outcomes in individuals with Type 1 Diabetes (T1D) in Iran.</p> Methods <p>This was a two-group, parallel, single-blind, randomized controlled trial (RCT) study conducted from July 2023 to May 2024. Sixty individuals with T1D were recruited from comprehensive health centers in Iran and randomly assigned in a 1:1 ratio to either the intervention group (<i>n</i> = 30) or the control group (<i>n</i> = 30) using MinimPy software. The intervention group participated in a 4-week program, where they viewed and discussed peer-created DST videos depicting successful T1D management, while the control group received routine care. Study outcomes, including diabetes distress, diabetes burnout, and depressive symptoms, were measured at baseline, immediately post-intervention, and one month post-intervention using validated scales. Data were analyzed using SPSS version 24.0, employing both descriptive and inferential statistics.</p> Results <p>The intervention group demonstrated significant improvement in mean scores for diabetes distress, diabetes burnout, and depressive symptoms at two time points (immediately post-intervention, and one-month post-intervention), with all p-values &lt; 0.001. In contrast, no significant differences were observed in these scores at any time point within the control group (<i>p</i> &gt; 0.05).</p> Conclusion <p>Reflecting on peer-created DST videos appears to be an effective intervention for reducing diabetes distress, diabetes burnout, and depressive symptoms in individuals with T1D. This study addresses a gap in the literature by evaluating a theory-driven, peer-led digital intervention in a low-resource setting. This approach could serve as a valuable model for mental health promotion initiatives in this population. Further research is needed to assess the long-term effects and sustainability of DST interventions.</p> Trial registration <p>This study was registered as a RCT at the Iranian Clinical Trial Center. Registration Date: 2023/07/05, Registration Number: IRCT20170625034743N2.</p>