Both. I'm impressed with how you have handled this situation. I'm impressed by how you have handled this situation. Sounds legit to me! At least from a colloquial point of view

I'm impressed by you people! (Maybe because of your way of doing things and I am a little bit amazed.) I'm impressed with their work. (Their work has left me with strong impression. I'll remember it for a very long time. My own work may even changes because of theirs.)

Thank you guys!