The clinical and financial effects of mental disorders are largely unknown among gastrointestinal (GI) cancer patients. Using the Surveillance, Epidemiology, and End Results (SEER)‐Medicare linked database, we identified patients whose first cancer was a primary colorectal, pancreatic, gastric, hepatic/biliary, esophageal, or anal cancer as well as those with coexisting depression, anxiety, psychotic, or bipolar disorder. Survival, chemotherapy use, total healthcare expenditures, and patient out‐of‐pocket expenditures were estimated and compared based on the presence of a mental disorder. We identified 112,283 patients, 23,726 (21%) of whom had a coexisting mental disorder. Median survival for patients without a mental disorder was 52 months (95% CI 50–53 months) and for patients with a mental disorder was 43 months (95% CI 42–44 months) (
p
< 0.001). Subgroup analysis identified patients with colorectal, gastric, or anal cancer to have a significant association between survival and presence of a mental disorder. Chemotherapy use was lower among patients with a mental disorder within regional colorectal cancer (43% vs. 41%,
p
= 0.01) or distant colorectal cancer subgroups (71% vs. 63%,
p
< 0.0001). The mean total healthcare expenditures were higher for patients with a mental disorder in first year following the cancer diagnosis (increase of $16,823, 95% CI $15,777‐$18,173), and mean patient out‐of‐pocket expenses were also higher (increase of $1,926, 95% CI $1753–$2091). There are a substantial number of GI cancer patients who have a coexisting mental disorder, which is associated with inferior survival, higher healthcare expenditures, and greater personal financial burden.