Background: Breast cancer is the most common cancer among women in the United States. Newly diagnosed patients with breast cancer often experience anxiety, depression, and stress. However, the impact of psychological distress on healthcare resource utilization (HCRU) and costs has not been adequately assessed.Objectives: To evaluate the incidence and prevalence of anxiety, depression, and stress reaction/adjustment disorder among patients newly diagnosed with breast cancer, to examine HCRU and costs, and to assess the association of these psychiatric disorders with costs.Methods: This retrospective observational cohort study was conducted using a large US administrative claims database with an index date of newly diagnosed breast cancer. Demographics and comorbidities (including anxiety, depression, and stress reaction/adjustment disorder) were assessed using data collected 12 months before and after the index date. HCRU and costs were assessed using data collected 12 months after the index date. Generalized linear regressions were performed to examine the association between healthcare costs and anxiety, depression, and stress reaction/adjustment disorder.Results: Of 6392 patients with newly diagnosed breast cancer, 38.2% were diagnosed with psychiatric disorders including anxiety (27.7%), depression (21.9%), or stress reaction/adjustment disorder (6%). The incidence of these psychiatric disorders was 15% and the prevalence was 23.2%. Patients with anxiety, depression, or stress reaction/adjustment disorder had higher rates of several types of HCRU (P < .0001) and higher total all-cause costs compared with patients without these psychiatric disorders (P < .0001). Patients with incident anxiety, depression, or stress reaction/adjustment disorder incurred higher all-cause costs in the first year following breast cancer diagnosis than those with prevalent anxiety, depression, or stress reaction/adjustment disorder (P < .0003), or those without these psychiatric disorders (P < .0001).Discussion: Of patients with anxiety, depression, or stress reaction/adjustment disorder, those with incident psychiatric disorders had higher healthcare costs, suggesting that new-onset psychological distress may contribute to higher costs incurred by the payer. Timely treatment of psychiatric disorders in this population may improve clinical outcomes and reduce HCRU and costs.Conclusions: Anxiety, depression, and stress reaction/adjustment disorder were common among patients newly diagnosed with breast cancer and were associated with increased healthcare costs in the first year following breast cancer diagnosis.