The eruption of Indonesia's Mount Merapi volcano in 2010 caused extensive environmental degradation. Settlements and hundreds of hectares of farmlands were buried under volcanic ash. Until now, there has been no research on the psychosocial impact of living in an environment damaged by a volcanic eruption. We studied and compared the psychosocial impact of environmental damage on volcano survivors from two subdistricts-Cangkringan and Pakem. Cangkringan survivors affected by the 2010 eruption continue to live in a damaged environment. The Pakem subdistrict was damaged by eruptions of Mt Merapi in the 1990s but there is no recent damage to their environment. The Indonesian-Environmental Distress Scale (I-EDS), a translated revision of the original Environmental Distress Scale (EDS), was used to collect data. Exploratory statistical methods and multivariate linear regression analyses were performed to examine the relative contributions of demographic variables on the psychosocial impact of living in an environment damaged by volcanic eruption. A total of 348 survivors of the Mt Merapi eruption participated in the survey. The mean I-EDS score for Cangkringan district was 15.8 (SD 1.6; range 11.8-19.8) compared to 14.6 (SD 1.3; range 11.8-18.3) for Pakem district (P < 0.001). This result was confirmed by multiple linear regression analysis showing further that older respondents (P < 0.001), unemployed and retired respondents (P = 0.007), and respondents with no formal school education (P = 0.037) had lower I-EDS scores compared to the respective reference groups. Survivors of the Mt Merapi eruption who continue to live in the environment damaged by the 2010 volcanic eruption experience environmental distress. Relevant interventions should target those from low sosioeconomic groups to deal with the distress.