Background Evidence shows that nurse navigation is effective for patients diagnosed with cancer. Research on the effects of oncology nurse navigation on mental health is ongoing, but few studies have investigated the impact of such interventions on medical experience, demoralization, and distress. Further, nurse navigation is rarely implemented in Taiwan. Aims To investigate the prevalence of mental health problems and whether oncology nurse navigation improved the mental health outcomes and medical experience of patients with cancer. Methods and results In this randomized controlled clinical trial, we recruited 128 outpatients with cancer via purposive sampling from a teaching hospital in northern Taiwan. Participants were randomly assigned to the navigation group (received navigator and usual care; N = 61) or the usual-care group (received usual care only; N = 67). Questionnaires included the self-reported Distress Thermometer, Hospital Anxiety and Depression Scale, Demoralization Scale, and Patient Assessment of Chronic Illness Care. Data were collected at baseline and after three and six months of the intervention and analyzed using descriptive statistics and unpaired t, Mann–Whitney U, chi-squared, and Fisher’s exact tests. Generalized estimating equations were used to analyze differences between the groups. The prevalence rates of anxiety, depression, distress, and demoralization were 17.9%, 15.7%, 29.7%, and 29.7%, respectively. After three months, participants in the navigation group exhibited significantly reduced anxiety (odds ratio [OR] = 0.106, p = 0.003), demoralization (OR = 0.294, p = 0.017), and emotional distress (OR = 0.314, p = 0.047), and reported a better medical experience (OR = 1.418, p = 0.020) than those in the usual-care group. However, there was no significant treatment effect at six months. Conclusions Oncology nurse navigation may offer benefits for the mental health and medical experience of patients with cancer. Nurse-navigator roles and programs should thus be expanded across healthcare systems.