Mindset theory describes a context-dependent belief system on the degree that intelligence can change with effort. Students' chemistry mindsets may predict students' behavioral responses to challenges they experience within a chemistry course. This study was designed to investigate whether challenges mediate the relationship between chemistry mindset and academic performance. 745 first-semester general chemistry students participated in the study. The students were surveyed on their mindset at the beginning and challenges they experienced through the end of the semester. Factor analyses were performed to characterize commonalities in students' perception of challenges, and structural equation modeling was used to examine whether challenges mediate the relationship between chemistry mindset and academic performance. To gain more insight, students reporting fixed and growth mindsets were compared regarding challenges and how challenges relate to their final grades. Analysis of data revealed that challenges can be perceived in concert with others, which resulted in three fundamental challenges: individual challenges, teaching-related challenges, and chemistry-related challenges. Chemistry-related challenges mediated the relationship between mindset and academic performance. Further, students reporting a growth mindset and earning a grade of C+ or lower rated the three fundamental challenges as relatively high. These challenges may explain why some students who report a growth mindset can earn a low grade. Among students reporting a fixed mindset earning a grade of C+ or lower, only chemistry-related challenges were rated highly. Understanding the nature of challenges and their role in success provides potential opportunities to modify instruction to support all students' success in chemistry.