Eighty-nine patients were prospectively studied to determine psychological and psychosocial impairment prior to and after coronary artery graft surgery (CAGS). Psychological morbidity prior to surgery was high, with one-third having clinically significant levels of depression and/or anxiety symptoms. Scores on the Psychosocial Adjustment to Illness Scale indicated a generally high level of psychosocial impairment pre-operatively, with vocational and domestic functioning being most severely affected, social and sexual functioning being less impaired, and extended family relationships being largely unaffected. In general, there was a significant reduction in psychological morbidity and an improvement in psychosocial functioning at 6 months, which remained at 12 months. Vocational and domestic functioning showed the greatest improvement. Sexual and social functioning showed modest improvements overall, with significant numbers reporting residual impairment due to their heart disease. These findings add to a growing body of evidence demonstrating generally favourable psychological and social outcome following CAGS.