Drawing upon the conservation of resource theory, we offer a framework for understanding the mechanism underlying the effect of public employees’ overqualification on their cognitive and behavioral outcomes, through both positive and negative paths. We propose that perceived overqualification elicits two subjective cognitions, namely, perceived control and psychological entitlement, which further lead to public employees’ behaviors through approach (organizational citizenship behavior) and avoidance (workplace deviance behavior) tendencies. A total of 421 public employees participated in the three-stage time-lag investigation. The findings indicated that public employees’ perceived overqualification is positively related to perceived control, and perceived control is positively related to organizational citizenship behavior. Perceived control completely mediates the relationship between perceived overqualification and organizational citizenship behavior. Perceived overqualification is positively related to psychological entitlement, and psychological entitlement is positively related to workplace deviance behavior. Psychological entitlement completely mediates the relationship between perceived overqualification and workplace deviance behavior. This study constructed a double-edged sword model of perceived overqualification based on the public sector, discussing the influence of public employees’ perceived overqualification on their workplace behaviors from the perspective of resource assessment and self-evaluation, and providing theoretical guidance for the practice of human resource management within the public sector.