Background Excessive and persistent fear of clusters of holes, also known as trypophobia, has been suggested to reflect cortical hyperexcitability and may be associated with mental health risks. No study, however, has yet examined these associations in representative epidemiological samples. Aims To examine the prevalence of trypophobia in a population-representative youth sample, its association with mental health and functioning, and its interaction with external stress. Method A total of 2065 young people were consecutively recruited from a household-based epidemiological youth mental health study in Hong Kong. Trypophobia, symptoms of anxiety, depression and stress, and exposure to personal stressors were assessed. Logistic regression was used to assess the relationships between trypophobia and mental health. Potential additive and interaction effects of trypophobia and high stress exposure on mental health were also tested. Results The prevalence of trypophobia was 17.6%. Trypophobia was significantly associated with severe symptoms of anxiety (odds ratio (OR) = 1.83, 95% CI = 1.32–2.53), depression (OR = 1.78, 95% CI = 1.24–2.56) and stress (OR = 1.68, 95% CI = 1.11–2.53), even when accounting for sociodemographic factors, personal and family psychiatric history, resilience and stress exposure. Dose–response relationships were observed, and trypophobia significantly potentiated the effects of stress exposure on symptom outcomes, particularly for depressive symptoms. Those with trypophobia also showed significantly poorer functioning across domains and poorer health-related quality of life. Conclusions Screening for trypophobia in young people may facilitate early risk detection and intervention, particularly among those with recent stress exposure. Nevertheless, the generally small effect sizes suggest that other factors have more prominent roles in determining recent mental health outcomes in population-based samples; these should be explored in future work.