A highly sensitive and simple high-performance liquid chromatographic–tandem mass spectrometric (LC–MS–MS) assay was developed and validated for the quantification of N-acetyl tryptophan (NAT) in formulations and to identify impurities under different stress conditions. N-acetyl tryptophan was analyzed using a reversed-phase gradient elution after treatment under acidic, basic, oxidative, hydrolytic and thermal stress conditions. Linearity in the calibration curve was obtained at a concentration range of 10–100 µgmL−1 (R2 = 0.9916). The lower limits of detection and quantification were 3.53 and 10.69 µgmL−1. The degradation of NAT was observed maximum under oxidation stress (52.84%) and minimum under thermal stress (10.22%). Three major degradation products were formed under acidic and basic stress conditions, of which tryptophan was the major one. Thermal stress yielded a single major impurity at m/z 230. Water hydrolysis could form dihydroxy-N acetyl tryptophan at m/z 279. Oxidation stress led to the formation of seven major degradation products. The most effective stress condition was found to be oxidative which leads to 52.84% degradation of the drug followed by acidic stress (34.64%) and basic stress (15.66%). The present study showed an accurate, precise and sensitive LC–MS–MS method for the systematic investigation of NAT and its impurities in formulations.