This study investigates relatively unexplored impact of sea-level rise (SLR) on the psychological health of coastal populations. A longitudinal research design was employed, involving 1,144 participants from coastal communities in Bangladesh with different degree of vulnerability. Data collection phases included before and after the monsoon season of 2021. This research demonstrates that psychological health, particularly distress, depression, anxiety, and stress deteriorate markedly during the post-monsoon months (October-November) in communities more vulnerable to SLR. This deterioration is linked to an increase in environmental stressors and a sense of resource loss with the latter mediating the relationship. Additionally, we found a decrease in resilience and an increase in COVID-19 anxiety. This research illuminated multifaceted relationships between SLR, environmental stress, resource loss, and psychological health, providing valuable insights to inform the development of tailored interventions and policies for supporting the wellbeing of coastal populations, affected by growing risk of SLR.