The purpose of this research was to better understand the complex relationship between sports motivation and athlete’s mental health. Taking into consideration The self-determination theory, which emphasizes the importance of satisfying basic psychological needs for mental health, the role of satisfying these psychological needs in the relationship between sports motivation and specific components of mental health was examined. The study included a total of 302 participants with an average age of 26.59 years, including 155 women and 147 men. There were 117 active athletes and 185 recreational athletes. The study used the following measures: The Hedonic and Eudaimonic Motives for Activities scale, Mental Health Continuum Short Form, and Basic Psychological Needs Scale. Besides that, necessary demographic data were collected, and the intention to continue participating in sports was examined. The results indicate a positive correlation between sports motivation and all examined components of mental health. The mediating role of satisfying basic psychological needs was found when the analysis was conducted separately for active and recreational athletes. However, a significant result was not obtained when mediation was analyzed for the entire sample. Among active athletes, psychological needs were a significant mediator in the relationship between eudaimonic motivation and mental health, while among recreational athletes, the mediating role of basic psychological needs was significant in the relationship between hedonic motivation and mental health. The research results contribute to the literature on the relationship between motivation in athletes and their mental health and imply the need for further research of the complexity of this relationship.