Objective: Insight and affect awareness are correlated with outcome in a number of studies across different treatment orientations. In this study, we perform a full mediational analysis to examine whether improvement of both cognitive insight and affect awareness are mediators of the specific effects of transference work in dynamic psychotherapy. Method: This was a dismantling randomized controlled clinical trial specifically designed to study long-term effects of transference work (exploration of problematic patterns in the therapeutic relationship). One hundred outpatients were randomly assigned to 1 year of dynamic psychotherapy with and without transference work interventions. The outcome variables were the Interpersonal Functioning scale (clinician rated) and Inventory of Interpersonal Problems (patient self-report). Quality of Object Relations was moderator. Using structural equation modeling, we tested change during treatment (1 year) of Insight and Tolerance for Affects as mediators of long-term outcome (over the 1-year study period). Results: For both outcome measures, the best model supported a mediated moderation model where the effects of transference work, for patients with low Quality of Object Relations, were mediated via both change of Insight and Tolerance for Affects. The effect of Insight on outcome was significantly reduced due to an indirect effect via Tolerance for Affects. A number of alternative models allowed us to rule out alternative pathways with some confidence. Conclusions: Both improved insight and affect awareness seem to be mechanisms for long-term effects of transference work. Our results bridge the gap between mainstream clinical theory and empirical research. What is the public health significance of this article? Converging evidence has been published indicating that insight and affect awareness are predictors of outcome across treatment modalities. This study extends such findings and suggests that gain of both cognitive insight and affect awareness are key mechanisms of change in dynamic psychotherapy. Our findings may also have implications for different types of psychotherapy. Therapists, across theoretical orientations, should address problems in the therapeutic relationship and focus on both cognitions and affects.