Co-occurring emotional distress and chronic pain are a true challenge in the clinic. This combination of symptoms is quite common but associated with poor treatment results, frequent relapses and costly dysfunction. This paper describes a transdiagnostic approach to the problem by focusing on psychological processes that drive both the emotional as well as the pain problem. Avoidance and context (in)sensitivity are suggested as potential transdiagnostic factors that might be targeted in treatment. Since both pain and distress are aversive, they may be avoided. This may be helpful in the short-term, but paradoxically the avoidance maintains the problem in the long-term. Context sensitivity concerns how well our responses are in tune with the changing demands of the environment. We propose that context insensitivity may drive emotional distress and pain problems. We present data that show that disclosure of pain is important emotionally, but that it is also a challenge to respond in manner that is sensitive to the social context. Indeed, disclosing how we feel emotionally or concerning pain might be helpful in some situations, but enhance the problem in others. Finally, we outline a hybrid treatment that combines exposure for pain (feared movements) and emotions (disclosure) with context sensitivity training. While such new treatments are promising, there remains a dire need for more clinical research to test and improve treatments for co-occurring emotional distress and pain.