Mental health nursing is widely recognized as a stressful occupation; however, little is known about the relationship between work-related stress and health-related quality of life of mental health nurses (MHN). This study aimed to identify MHN health-related quality of life (HR-QoL) and work-related stressors; associations between stressors and HR-QoL; and predictors of HR-QoL. An online cross-sectional survey collected demographic data, work-related stressors and HR-QoL (SF-12v2) of n = 498 Australian MHN. Prominent consumer/carer-related stressors were verbal (90%) and physical aggression (85%). Collegial stressors included staff conflict (71%) and bullying (55%), and colleague-perpetrated verbal (34%) and physical aggression (7%). Key organizational stressors included high workloads (74%), lack of organizational support (60%) and lack of adequate resources to perform nursing role (58%). The mean physical health score was 52.62 (SD = 8.30), and mental health score was 43.59 (SD = 11.34), with mental health substantially lower than national norms (mean difference = 10.11). There were statistically significant negative correlations between the number of work-related stressors and HR-QoL. Younger (21–30 years) and less experienced (<1–4 years) MHN had substantially lower mental health. Higher mental health was predicted with < 15 stressors, >4 years’ experience and working in the community. The poorer mental health of MHN has concerning implications for the well-being, retention and practice of the largest group in the mental health workforce. There is a critical need for organizations to enact effective policy and initiatives to reduce workplace aggression, improve staff psychological and physical safety, and strengthen well-being and resilience. New graduates are a priority group for urgent intervention.