<p>Parents of children with autism spectrum disorder (ASD) experience psychological struggles due to insufficient information about the disorder and the inability to handle their children’s unusual behaviors and challenges. In this issue, competency-based psychoeducation is assumed to fill the gap and reduce psychological disturbances. This study addressed the impact of competency-based psychoeducation on psychological distress in parents of children with ASD. We followed a single-group pretest-posttest design to complete the study. Twenty-eight parents of children with ASD were purposively selected as the targeted sample. Data were collected through a researcher-made questionnaire and an adapted Bangla version of DASS-21. We applied descriptive and inferential statistics to the data analysis process. The study explored that competency-based psychoeducation significantly increased knowledge about autism (<i>t</i> = − 2.79, <i>p</i> &lt; .05) and reduced depression, anxiety, stress, and overall psychological disturbances (<i>t</i> = 1.73–3.46, <i>p</i> &lt; .01). In addition, we found an association between the increased knowledge about ASD and decreased psychological disturbances among parents. The findings highlighted the benefits of competency-based psychoeducation for reducing parental distress with ASD children. It was also associated with the benefit of their children. The practical implications of these discoveries for research and clinical settings are discussed based on previous studies.</p>