Migrants living in the informal settlements of Southern Spain tend to have precarious employment and poor living conditions, making then vulnerable to mental health issues. This study aimed to assess psychological distress in a sample of unemployed migrants residing in informal settlements in the province of Huelva (southern Spain), during the fourth wave of the COVID-19 pandemic. A descriptive cross-sectional study was conducted during the months of April to June 2021, through a heteroadministered questionnaire, in informal settlements. The measurement instrument was the General Health Questionnaire (GHQ-12), used to analyze psychological distress, and other sociodemographic and health-related variables. Univariate and bivariate descriptive data analysis were performed, using the nonparametric statistics Mann–Whitney U test, Kruskal–Wallis H test, and Tau β correlation. A categorical regression analysis was performed to study the relationship between psychological distress and the rest of the variables. The sample consisted of 317 subjects, 83.9% of whom were males, and the mean age was 33.4 years (SD = 10.7 years). The mean score obtained in the GHQ-12 questionnaire was 13.69 points (SD = 3.86). Significant differences were found between levels of psychological distress and substance abuse (H = 14.085; P = .049), people who wished to stay in Spain (t = 6987; P = .049), people who experienced isolation due to COVID-19 contact (t = 1379.5; P = .001), people who needed medical assistance due to COVID-19 (t = 7.990; P = .018), and those who reported having chronic illnesses (t = 2686.5, P = .02). The mean score of psychological distress indicates general high levels of psychological distress. Participants who had experienced isolation due to COVID-19 contact, who consumed substances, and who had chronic illnesses reported the highest levels of psychological distress.