•A significant reduction in psychological impact 4 weeks after COVID outbreak.•The mean scores of respondents in both surveys were above PTSD cut-offs.•Female gender, physical symptoms associated with a higher psychological impact.•Hand hygiene, mask-wearing & confidence in doctors reduced psychological impact.•Online trauma-focused psychotherapy may be helpful to public during COVID-19. In addition to being a public physical health emergency, Coronavirus disease 2019 (COVID-19) affected global mental health, as evidenced by panic-buying worldwide as cases soared. Little is known about changes in levels of psychological impact, stress, anxiety and depression during this pandemic. This longitudinal study surveyed the general population twice - during the initial outbreak, and the epidemic's peak four weeks later, surveying demographics, symptoms, knowledge, concerns, and precautionary measures against COVID-19. There were 1738 respondents from 190 Chinese cities (1210 first-survey respondents, 861 s-survey respondents; 333 respondents participated in both). Psychological impact and mental health status were assessed by the Impact of Event Scale-Revised (IES-R) and the Depression, Anxiety and Stress Scale (DASS-21), respectively. IES-R measures PTSD symptoms in survivorship after an event. DASS -21 is based on tripartite model of psychopathology that comprise a general distress construct with distinct characteristics. This study found that there was a statistically significant longitudinal reduction in mean IES-R scores (from 32.98 to 30.76, p < 0.01) after 4 weeks. Nevertheless, the mean IES-R score of the first- and second-survey respondents were above the cut-off scores (>24) for PTSD symptoms, suggesting that the reduction in scores was not clinically significant. During the initial evaluation, moderate-to-severe stress, anxiety and depression were noted in 8.1%, 28.8% and 16.5%, respectively and there were no significant longitudinal changes in stress, anxiety and depression levels (p > 0.05). Protective factors included high level of confidence in doctors, perceived survival likelihood and low risk of contracting COVID-19, satisfaction with health information, personal precautionary measures. As countries around the world brace for an escalation in cases, Governments should focus on effective methods of disseminating unbiased COVID-19 knowledge, teaching correct containment methods, ensuring availability of essential services/commodities, and providing sufficient financial support.