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The present study investigates the role of LGBTQ-friendly state policy environments as a potential moderator of the relationship between discrimination at mental health care clinics and negative health outcomes (e.g., substance use coping, attempting suicide) in a transgender and gender-diverse (TGD) population. Discrimination within health care settings remains a significant barrier to accessing care for TGD individuals, with experiences being linked to higher rates of substance use and suicide attempts. This study uses a nationally representative sample from the 2008-2009 National Transgender Discrimination Survey and examines the moderating effects of state-level policy climates on these associations. Results show TGD individuals living in states with more favorable policy climates reported weaker associations between discriminatory experiences and negative health outcomes compared to those living in states with less supportive policy climates. Specifically, both denial of equal treatment and verbal harassment at mental health clinics were both significantly associated with higher odds of both substance use coping and attempting suicide. This suggests positive policy environments may provide a protective buffer, reducing the harm caused by discrimination on TGD individuals' mental health and well-being. While the present study follows existing literature on the importance of LGBTQ-friendly policies in supporting gender-diverse communities, it also highlights the need for further research to understand the full impact policies can have. Additionally, the study calls for interventions that are more targeted within healthcare settings (e.g., LGBTQ-inclusive training for mental health professionals) to better protect TGD individuals from discrimination. Finally, future research should also look to explore the evolving landscape of both federal and state policies and their effects on healthcare experiences and outcomes for TGD people with a particular focus on gender-affirming care.