Background: The quality of nursing care is influenced by the psychological state of nurses. Psychological distress of nurses can negatively impact nurses' performance and competence. While psychological well-being improves quality of care. So, the organization should provide interventions to improve the psychological well-being and reduce psychological distress of nurses. Aim of the study: To assess the impact of psychological distress and well-being of nurses on quality of nursing care at psychiatric hospitals. Research design: Descriptive correlational research design. Setting: The study was performed at three hospitals. Psychiatric and neurological hospital at Assiut University, Assiut mental health hospital, and Sohag mental health hospital. Sample: Non-probability convenience sample includes all psychiatric nurses. Tools: Demographic characteristics data sheet, general health questionnaire, psychological well-being scale, and quality of nursing care scale. Results: More than two thirds of the studied nurses were females, more than half of studied nurses had secondary school of nursing, less than nearly one quarter of them suffer from moderate distress. Conclusion: psychological distress negatively impacts nurses' ability to provide high quality care. In contrast, high psychological well-being can enhance nursing care. Recommendation: Implementing stress management program to alleviate stress and improve nurses' psychological well-being in psychiatric settings.