Abstract In this commentary, we overview the existing research on psychological consequences caused by COVID-19 for both residents and staff in the nursing homes. We identify loneliness and emotional anxiety as main psychological consequences for nursing home residents, whereas uncertainty, hopelessness, work overload, and role conflicts are the most salient psychological challenges for the staff in the nursing homes during the pandemic. We then summarize the existing strategies and interventions responsive to the above challenges. We suggest that this overview may help nursing home managers understand what are the key psychological challenges and how to deal with them during a crisis period. Finally, we also encourage future research to pay more attention to exploring interventions specifically designed for vulnerable older people, understanding the role of the nursing home leader team in managing emotional and ethical challenges in organizations, and developing community-wide collaboration with multiple external stakeholders.