The emergence of coronavirus disease has impacted human lives, one of which is economic disruption. Many Malaysian organisations have devised various crisis-response techniques, such as downsizing, laying off, retrenching, and combining. As a result, the number of Malaysians working in precarious jobs, which are defined by unpredictable and uncertain situations, has indirectly increased, hence increasing job insecurity. Therefore, maintaining psychological health is essential to safeguarding the mental health of employees. In the current working landscape, job security and work–life balance have commonly been deemed necessary in contributing to well-being among employees. As a result, the purpose of this study was to examine how work–life balance influences the relationship between job insecurity and psychological well-being among Malaysian precarious workers. It also fills a gap in the research by explaining the causal association between job insecurity and psychological well-being among precarious workers, as previous well-being studies have largely focused on employees with secure jobs. There were 442 responders collected using purposive and snowball sampling methods, and they were requested to complete the Job Insecurity Scale (JIS), Work–Life Balance, and Well-Being Index Scale (WHO-5). Job instability was negatively connected with work–life balance and psychological well-being. On the other hand, work–life balance was found to be positively related to psychological well-being. This supports the notion that work–life balance is a significant mediator in the relationship between job insecurity and psychological well-being. These findings emphasise that Malaysian precarious workers with job security could enhance their psychological well-being by achieving work–life balance.