Introduction: Grandparents usually played an important role in the care of their grandchildren and often provide care and assistance to their grandchildren. Across the world, grandparents are principal caregivers or supplement other forms of extra family care and this experience may have an effect on their psychological well-being. Objective: The objective of this study was to assess the extent of psychological well- being of urban grandparents caring grandchildren. Methods: This cross-sectional study was conducted among grandparents over the period of one year from January to December 2018 among 171 participants. Participants were selected by purposive sampling; data were collected by face-to-face interview with a semi-structured questionnaire to observe socio-demographic characteristics, caregiving information and PSS, 3-item UCLA Loneliness scale, HADS scale for psychological well-being. Data was analyzed by IBM software-SPSS 25 version. Results: Study revealed that, 71% were grandmother and 49% were grandfather. There was statistical significant association between psychological well-being and gender (p<0.01). There was significant association between age group and psychological well-being and age was negatively correlated with stress (p< 0.01), loneliness (p< 0.05) and anxiety (0.01). In this study 75% were married and 25% were widowed/widower. Loneliness was significantly associated with marital status (p<0.01). Monthly family income was negatively correlated with loneliness (p<0.01) and depression (p<0.05). There was significant association between psychological well-being and duration of caregiving (p<0.01) and duration of caregiving was positively correlated with loneliness (p<0.01), anxiety (p<0.01), depression (p<0.01). In this study, 64% grandparents experienced problem during caring and 36% didnt which was significantly associated with psychological well-being (p<0.01). Psychological well-being attributes (stress, loneliness, anxiety, depression) were significantly correlated with each other (p<0.01). Conclusion: The findings of this study revealed that there are some adverse consequences on grandparents psychological well-being. Effective measure should be taken for caregiver grandparents.