This study aimed to evaluate the association between shift work disorder and mental health in hospital-based nurses. Staff completed an online survey comprising demographic questions, the Shift Work Disorder Questionnaire, Patient Health-9 and the General Anxiety Disorder-7 scale. Sick leave data were collected from archival records from the Human Resources Department. Two hundred and two nurses (95% female; age M = 35.28 years ± SD = 12) participated (42% of eligible staff). Those at high risk of shift work disorder had higher depression (M = 7.54 ± SD = 4.28 vs. M = 3.78 ± SD = 3.24; p < 0.001) and anxiety (M = 5.66 ± SD = 3.82 vs. M = 2.83 ± SD = 3.33, p < 0.001) compared to those at low risk. Linear regression models showed that being at high risk of shift work disorder was the most significant predictor of depression, explaining 18.8% of the variance in depression (R2 = 0.188, adjusted R2 = 0.184, F(1, 200) = 46.20, p < 0.001). Shift work disorder combined with the number of night shifts and alcoholic drinks on non-work days accounted for 49.7% of the variance in anxiety scores (R2 = 0.497, adjusted R2 = 0.453, F(3, 35) = 11.51, p < 0.001). Mean sick leave in those with high risk of shift work disorder was 136.17 hr (SD = 113.11) versus 103.98 hr (SD = 94.46) in others (p = 0.057). Depression and years of shift work accounted for 18.9% of the variance in sick leave taken (R2 = 0.189, adjusted R2 = 0.180, F(2, 175) = 20.36, p < 0.001). Shift work disorder is strongly associated with depression and anxiety, providing a potential target to improve mental health in shift workers. Depression, in turn, is a significant contributing factor to sick leave.