While stress is one of the central concepts in many contemporary theories of health, there is no universal definition of stress or stressors. Stress is usually understood as a subjective experience of tension, pressure, distress, fear or negative emotions that occurs as a result of a perceived threat to one’s mental or physical well-being and is accompanied by an evolved biological response that facilitates adaptive reaction. While stress is conceptualized as a taxing condition, it is not understood as uniformly harmful per se. In fact, stress response is often cited as an adaptive reaction. Moreover, not every incident of stress exposure results in a disease or has an undermining effect on health. Mere exposure to stress does not warrant the healthy organism’s falling ill. Yet stress has been shown to affect health both directly and indirectly, having impact on multiple chronic conditions. Stressors vary in their severity and their ability to leave their mark on health, and it is therefore important to develop reliable methods of measuring stress to better understand how stress affects health and instigates pathology. One of the difficulties of measuring the effects of stress is connected to the distinction between external stressors and their internal appraisal. More recently, stress researchers began to make a distinction between stress exposure (i.e., facing an objectively measurable stressor) and perceived stress severity (i.e., a subjective experience of stress resulting from individual’s facing a stressor). The latter has been shown to have a superior predictive ability in terms of negative health outcomes (both breadth and depth of observed effects) compared to the former. Measurement-wise, subjective stress also tends to yield more precise results, which makes it preferable as a stress-assessment tool. The present article is a literature review study that delves into this distinction and attempts to shed light onto its implications for measuring stress and its effects on health.