Based on coping theory, the current research examines how and why COVID-19 phobia affects frontline healthcare professionals’ mental health, as well as their burnout and work-related stress. We focused on the mediating role of burnout and work-related stress in this study. In the current study, we also examined the moderating influence of healthcare professionals’ handwashing behavior using the Hayes Process model. We employed a daily diary approach to collect data from respondents in Pakistan’s frontline healthcare professionals (n = 79, 79 × 10 = 790) who were directly treating COVID-19 patients during the omicron wave. According to the findings of the study, COVID-19 phobia significantly disturbs healthcare professionals’ mental health, as well as significantly strengthens burnout and work-related stress. The findings also demonstrated that burnout significantly negatively influences mental health. The mediation influence of burnout and work-related stress in the association between COVID-19 phobia and mental health has shown to be significant. The moderation analysis revealed that high handwashing behavior significantly buffers the negative impact of COVID-19 phobia, as well as the adverse effect of burnout on healthcare professionals’ mental health. Moreover, our findings have theoretical and managerial implications, as well as new research directions for scholars to understand the adverse impact of daily obstacles on professionals’ (nurses and doctors, etc.) mental health and work performance, as well as issues based on resource conversation philosophy.