This study aimed to examine the relationships between occupational stressors, mental health problems, and sleep difficulty, and the mediating roles of cognitive fusion and cognitive reappraisal on the relationships in Chinese nurses. A total of 323 nurses (mean age = 32.11 ± 6.75 years) from 25 hospitals in China participated a cross-sectional online survey. Participants were asked to refer to the period during the severest time of the COVID-19 pandemic in China (January to March 2020) when assessing the psychological variables. The direct links from occupational stressors to cognitive fusion, cognitive reappraisal, mental health and sleep difficulty were significant. Cognitive fusion and cognitive reappraisal mediated the links from occupational stressors to mental health problems, while cognitive fusion and mental health problems mediated the links from occupational stressors to sleep difficulty. The sequential mediation via cognitive fusion and mental health problems as well as via cognitive reappraisal and mental health problems on the links from occupational stressors to sleep difficulty were also significant. Findings from the current study indicate that intervention strategies focusing on the reduction of cognitive fusion and improvement of cognitive reappraisal could help better prepare nurses to alleviate mental health problems and sleep difficulties that are related to COVID-19 and potentially similar pandemics in the future.