Our study investigates the complex relationship between small talk and workplace loneliness through two distinct pathways: eustress and relationship conflict. Drawing on the Challenge-Hindrance Stressor Framework (CHSF) and Self-Determination Theory (SDT), we conceptualize small talk as both a challenge and hindrance stressor. Using an experience-sampling methodology over 10 days with 111 full-time employees, we found that small talk reduces workplace loneliness at the within-person level by fostering eustress, a positive form of stress associated with connection and accomplishment. Conversely, it also increases workplace loneliness at the within-person level by fostering relationship conflict, a form of conflict that manifests as animosity and annoyance between individuals. However, our hypothesized effects were not significant at the between-person level, suggesting that the relationships mediated through eustress and relationship conflict vary across individuals. Our research highlights the multifaceted nature of small talk as a 'double-edged sword,' demonstrating both direct and indirect effects, and underscores the importance of recognizing its potential benefits and risks. These findings contribute to the literature on workplace loneliness, informal communication, and Self-Determination Theory, offering practical insights for organizations aiming to address loneliness and promote employee well-being.