This study investigates whether transitions into and out of unpaid caregiving are associated with increased risk for onset of or delayed recovery from psychological distress, and traces the prevalence of distress across successive years of caring activity and after caregiving has ceased. The analysis is based on data from the British Household Panel Survey covering 3000 would-be carers, 2900 former carers, and 11,100 non-carers during the 1990s; their psychological well-being was assessed at annual intervals using the General Health Questionnaire. Carers providing long hours of care over extended spells present raised levels of distress, women more so than men. Compared with non-carers, risk for onset of distress increases progressively with the amount of time devoted to caregiving each week. Adverse effects on the psychological well-being of heavily involved carers are most pronounced around the start of their care episodes and when caregiving ends. Ongoing care increases their susceptibility to recurring distress, and adverse health effects are evident beyond the end of their caregiving episodes. Several groups of carers experience psychological health inequalities compared with non-carers, especially those looking after a spouse or partner, and mothers caring for a sick or disabled child. The findings underline the importance for effective carer support and health promotion of early identification of carers, monitoring high risk groups, timing appropriate interventions, and targeting resources.