The deadliest coronavirus disease 2019 (COVID-19) is taking thousands of lives worldwide and presents an extraordinary challenge to mental resilience. This study assesses mental health status during the COVID-19 pandemic and its associated factors among informal waste workers in Bangladesh. A cross-sectional survey was conducted in June 2020 among 176 informal waste workers selected from nine municipalities and one city corporation in Bangladesh. General Health Questionnaire (GHQ-12) was used to assess respondents' mental health. The study found that 80.6% of the individuals were suffering from psychological distress; 67.6% reported anxiety and depression, 92.6% reported social dysfunction, and 19.9% reported loss of confidence. The likelihood of psychological distress (Risk ratio RR: 1.23, 95% confidence interval CI: 1.02-1.48) was significantly higher for female than male. Multiple COVID-19 symptoms of the family members (RR: 1.20, 95% CI: 1.03-1.41), unawareness about COVID-19 infected neighbor (RR: 1.21, 95% CI: 1.04-1.41), income reduction (RR: 1.60, 95% CI: 1.06-2.41) and daily household meal reduction (RR: 1.34; 95% CI: 1.03-1.73) were also found to be associated with psychological distress. These identified factors should be considered in policy-making and support programs for the informal waste workers to manage the pandemic situation as well as combating COVID-19 related psychological challenges.