Introduction: Psychiatric disorders are most prevalent (adjustment disorder-13-42%, depression-41-47% and generalized anxiety disorders upto 15%) in cancer patients. Some of initial responses like shock and denial, fear of disease and anxiousness about familial responsibilities are also common. Study aimed to investigate psychiatric morbidity in cancer patients. Material and Methods: The study was conducted at the cancer research centre of a large tertiary care hospital. Hamilton Rating Scale for Depression and Beck Anxiety Inventory were administered to the 200 cancer patients and 200 normal healthy relatives of patients. It was followed by a formal psychiatric interview based on the International Classification of Diseases-10 (ICD-10). The patients were studied before commencement of treatment to know the effect of cancer on psychological status of cancer patients. Results: The study revealed that a significant number of cancer patients (74%) suffered from psychiatric diagnostic entity (Adjustment disorder in 32%, Depression in 32% and Anxiety disorder in (10%) and other morbidities (suicidal ideations in 32%, Fear of disease and anxious about their familial responsibilities in 12% and Denial defense mechanism in 6%). Gastro-intestinal cancer patients suffered more from depression and other psychiatric disorders. Evaluation by Hamilton Rating Scale for Depression and Beck Anxiety Inventory also revealed more and statistically significant (P value= 0.000 and 0.011, respectively) psychiatric disorders and morbidities among cancer patients. Conclusions: The patients who were old, male, married, less educated and from lower socioeconomic status (SES) suffered more. However, female patients suffered more from adjustment disorder and more middle aged men had fear of disease and were anxious.