The SARS-COV-2 pandemic created an unprecedented crisis and raised concerns about racial discrimination and psychological distress. We assessed trends in COVID-19-related racism and discrimination irrespective of infection status and changes in emotional health and mental well-being outcomes due to experienced racism and discrimination. Using three waves of the Wisconsin COVID-19 Community Impact Survey (2020–2021), we compared demographics of respondents categorized by two mutually exclusive groups: reporting vs. not reporting COVID-19-related racism and discrimination. Using longitudinal logistic-multivariable regressions, we modeled changes in racism and discrimination-induced stress and 4-item patient health questionnaire screening for anxiety and depression (PHQ-4) associated with experiencing racism and discrimination. Prevalence of reported experiencing COVID-19-related racism and discrimination increased among adult Wisconsinites between 2020 and 2021: 6.28% in Wave 1, 11.13% in Wave 2 (Pearson’s chi-square Wave 1 vs 2=16.96, p<.001) vs. 10.87% in Wave 3 (chi-square, Wave 1 vs 3=14.99, p<.001). Experiencing COVID-19-related racism and discrimination was associated with a higher likelihood stress (OR=3.15, 95% CI 2.32–4.29) and a higher PHQ-4 score (coeff=0.63, 95% CI 0.32–0.94). Relative to White respondents, racial/ethnic minorities had a higher likelihood of feeling stress: Black OR=7.13, 95% CI 4.68–10.85; Hispanics OR=3.81, 95% CI 2.11–6.89; and other races OR=2.61, 95% CI 1.51–4.53. Estimated associations varied across racial/ethnic groups, age groups, and survey waves. Our study showed that experienced COVID-19-related racism and discrimination increased during the first 2 years of the pandemic and was associated with greater psychological distress among Wisconsinites of all racial/ethnic groups. Public health policies promoting inclusiveness should be implemented to reduce (COVID-19-related) racism and discrimination and its long-term effects on mental health and well-being.