Background: The aim of this study was to model the associations between the physician–patient relationship and patient outcomes, considering the mediating role of Self-Determination Theory variables. Method: The current study comprised a sample (N = 226) of Australians with a diagnosed chronic health condition. Path analysis via structural equation modelling was used to model the relationships between patients’ self-reported perception of the physician–patient relationship, motivation (autonomous and controlled), basic psychological needs (satisfaction and frustration), and patient outcomes (treatment adherence, mental health, and physical health). Results: Stronger physician–patient relationships indirectly predicted better physical and mental health, as well as greater adherence to treatment. This occurred through serial mediation, whereby stronger physician–patient relationships directly predicted need satisfaction, which in turn predicted autonomous motivation. Conversely, weaker physician–patient relationships indirectly predicted poorer mental health and lower adherence to treatment. This occurred through serial mediation where weaker physician–patient relationships predicted need frustration, which in turn predicted controlled motivation. Weaker physician–patient relationships also directly predicted controlled motivation. Conclusion: Satisfaction of basic psychological needs plays an important role in predicting patient motivation and outcomes. The current findings provide evidence that the physician–patient relationship plays a direct role in facilitating satisfaction and frustration of psychological needs, as well as patient motivation. Attention should be placed on interventions aimed at improving the physician–patient relationship as a means through which to increase need satisfaction, autonomous motivation, and, consequently, patient adherence and outcomes.