The sudden emergence of severe acute respiratory syndrome (SARS) caused international anxiety owing to its highly contagious and pandemic transmission. Health workers are vulnerable and are at high risk of infection. To assess SARS-related stress and its immediate psychological impact and responses among health workers. Health workers in a tertiary hospital affected by SARS were invited to complete a questionnaire designed to evaluate exposure experience, psychological impact and psychiatric morbidity. The risk and rates of psychiatric morbidity were estimated for exposure experience. Altogether, 1257 health workers successfully completed the survey. In the initial phase of the outbreak, when the infection was spreading rapidly, feelings of extreme vulnerability, uncertainty and threat to life were perceived, dominated by somatic and cognitive symptoms of anxiety. During the 'repair' phase, when the infection was being brought under control, depression and avoidance were evident. The estimated prevalence of psychiatric morbidity measured by the Chinese Health Questionnaire was about 75%. The outbreak of SARS could be regarded as an acute episode of a bio-disaster, leading to a significantly high rate of psychiatric morbidity.