Background: The purpose of this study was to investigate the current status of distress screening implementation in Japanese designated cancer hospitals. Subjects and Methods: This was a cross-sectional observational study. Palliative care team representatives in all designated cancer hospitals in Japan completed an ad hoc questionnaire. Demographic data in 2014 were obtained from the Ministry of Health, Labour and Welfare in Japan. Results: Of 422 institutions, 389 responded (92%) and data were obtained from 379 (90%). Approximately 90% of institutions had implemented a distress screening program at some level, and approximately 60% had just started screening. Among those institutions that screened, 77% provided individualized triage to specialized services within the institutions, whereas 60% did not routinely follow-up with patients who had positive screening results. The estimated median percentage of screened patients referred to palliative care teams was 0.4% in outpatient settings and 6.3% in inpatient settings. Although 68% of respondents perceived that screening was useful overall, they also reported difficulties when conducting screening with patients, reporting “no established effective treatment for problems screened” (66%), “patients complain it is difficult to express their distress using scales” (58%), and that it was “difficult to manage screened problems because of lack of time” (49%). Eight perceived barriers to implementing distress screening programs in hospitals were identified; a lack of human resources ranked highest. Conclusions: Implementation of distress screening in designated cancer hospitals in Japan has just begun. Policymakers should acknowledge that screening can be beneficial for patients when it is implemented with appropriate resources and established methods.