Atopic dermatitis (AD) has been associated with psychological distress, but few studies have examined the causal relationships. This study aimed to investigate whether stress, anxiety, or depression could lead to an increase in AD severity or vice versa in adults using a longitudinal study design. Daily diaries measuring psychological stress were completed over four weeks; validated questionnaires measuring stress, anxiety, depression, and AD severity were completed weekly for twelve weeks. Thirty-six participants (all female, aged 18-46 years) were recruited; complete data were returned from 19. Stress and disease severity were significantly correlated when measured daily and weekly for the duration of the study. Cross-lagged panel model (CLPM) analyses identified that for the weekly measures, stress, anxiety, and depression on week X significantly predicted disease severity on week X + 1. Disease severity on week X also predicted psychological stress, anxiety and depression on week X + 1 for the majority of the twelve weeks. There appears to be a bi-directional relationship between stress, anxiety and depression, and AD severity in women. High levels of distress should be identified so that optimum management strategies can be implemented to reduce the risk of increased AD severity and the resulting impact severity might have on psychological wellbeing.