Background: Sudden changes in clinical practice and the altered ability to care for patients due to the COVID-19 pandemic have been associated with moral distress and mental health concerns in healthcare workers internationally. This study aimed to investigate the severity, prevalence, and predictors of moral distress experienced by Australian healthcare workers during the COVID-19 pandemic. Methods: A nationwide, voluntary, anonymous, single time-point, online survey of self-identified frontline healthcare workers was conducted between 27th August and 23rd October 2020. Participants were recruited through health organisations, professional associations or colleges, universities, government contacts, and national media. Results: 7846 complete responses were received from nurses (39.4%), doctors (31.1%), allied health staff (16.7%) or other roles (6.7%). Many participants reported moral distress related to resource scarcity (58.3%), wearing PPE (31.7%) limiting their ability to care for patients, exclusion of family going against their values (60.2%), and fear of letting co-workers down if they were infected (55.0%). Many personal and workplace predictors of moral distress were identified, with those working in certain frontline areas, metropolitan locations, and with prior mental health diagnoses at particular risk of distress. Moral distress was associated with an increased risk of adverse mental health outcomes. Feeling appreciated by the community mitigated this risk in healthcare workers. Conclusions: Safeguarding healthcare workforces during crises is important for both patient safety and workforce longevity. Targeted interventions are required to prevent or minimise moral distress and associated mental health concerns in healthcare workers during COVID-19 and other crises.