"Psychological injury" in the workplace constitutes the fastest-growing sector of workers' compensation disability claims in several states. Most such claims pertain to effects of "occupational stress," including interpersonal conflicts with supervisors or co-workers, adaptation to changing work practices, and job insecurity. Of equal interest are the psychological consequences of chemical insults on the job. In the case of occupational respiratory exposures, psychological co-morbidity may occur along with a variety of acute, chronic, and latent illness states. Both predictable responses (such as adjustment reactions to disabling physical conditions) and idiopathic patterns (such as the development of odor-conditioned panic attacks or panic disorder) have been described. Physicians who evaluate and treat such patients need to be alert to the potential interaction of physiological and psychological stressors. Effective prevention and treatment requires not only an appreciation of the patient's view of the disease process, but also a recognition of the role of prognostic uncertainty in the subsequent development of anxiety symptoms. In some cases, exclusive attention to physical signs and symptoms may actually lead to a worsening of impairment and disability.