The COVID-19 pandemic has exposed the vulnerability of many families, including grandparent kinship families, to deal with a health/economic crisis. The fear of COVID-19 plus stay-at-home orders have increased individuals’ psychological distress. Moreover, school closures and homeschooling further increased parenting stress among caregivers. This study examined the relationship between material hardship and parenting stress among grandparent kinship providers, and assessed grandparents’ mental health as a potential mediator to this relationship during the COVID-19 pandemic in the United States. Grandparent kinship providers (N = 362) that took primary care of their grandchildren participated in a cross-sectional survey via Qualtrics Panels in June 2020 in the United States. Descriptive and bivariate analyses, binary logistic regression, and mediation analyses were conducted using STATA 15.0. Suffering material hardship was significantly associated with higher odds of experiencing parenting stress among grandparent kinship providers, and grandparents’ mental health partially mediated this association. Addressing material and mental health needs among grandparent kinship providers is critical to decreasing their parenting stress.