Context: Medical schools are challenged to create academic environments that stimulate students to improve their study progress without compromising their well-being. Objectives: This prospective comparative cohort study investigated the effects of raising Year-1 standards on academic performance and on students' chronic psychological and biological stress levels. Methods: In a Dutch medical school, students within the last Bachelor's degree cohort (n = 410) exposed to the 40/60 (67%) credit Year-1 standard (67%-credit cohort) were compared with students within the first cohort (n = 413) exposed to a 60/60 (100%) credit standard (100%-credit cohort). Main outcome measures were Year-1 pass rate (academic performance), mean score on the Perceived Stress Scale (PSS, psychological stress) and hair cortisol concentration (HCC, biological stress). Results: Year-1 pass rates were significantly higher in the 100%-credit cohort (odds ratio [OR] 4.65). Interestingly, there was a significant interaction effect (OR 0.46), indicating that raising the standard was more effective for male than for female students. PSS scores (n = 234 [response rate [RR]: 57%] and n = 244 [RR: 59%] in the 67%- and 100%-credit cohorts, respectively) were also significantly higher in the 100%-credit cohort (F(1,474) = 15.08, P <.001). This applied specifically to female students in the 100%-credit cohort. Levels of HCC (n = 181 [RR: 44%] and n = 162 [RR: 39%] respectively) did not differ between cohorts, but were significantly higher in female students (F(1,332) = 7.93, P <.01). In separate models including cohort and gender, both PSS score (OR 0.91) and HCC (OR 0.38) were significantly associated with Year-1 performance. Only students with both high PSS scores and high HCC values were significantly at risk of lower Year-1 pass rates (OR 0.27), particularly male students. Conclusions: Raising the Year-1 performance standard increased academic performance, most notably in male students. However, it also increased levels of perceived stress, especially in female students. In particular, the combination of high levels of perceived stress and biological stress, as measured by long-term cortisol, was related to poor academic performance. The study suggests a relationship between raising performance standards and student well-being, with differential effects in male and female students.