During the coronavirus disease 2019 (COVID-19) pandemic, Fangcang shelter hospitals were opened in Wuhan, China, to isolate and care for patients with mild or moderate symptoms. The patients and staff in the hospitals faced mental health challenges. This paper reports the experiences and mental health needs from them. Following the qualitative design, semi-structured interviews were conducted in the EastWest Lake Fangcang Shelter Hospital, Wuhan on March 2020. Data collection and analysis was based on grounded theory. Open coding was adapted and a structured codebook was developed through coding seminars. The themes and subthemes were then confirmed through thematic analysis. The findings were further explained and integrated in a theoretical framework. A total of 10 COVID-19 patients and 13 staff, including doctors, nurses, psychiatrists, and policemen participated in the interviews. They have common needs, as well as their own needs. The perspectives from the staff also did complement for needs of the patients. The mental health needs were generalized into four themes, that is, basic needs, information and communication, emotional needs, and social support, each with several subthemes. In addition, there were some external factors that regulated the internal needs, which were summarized in a theoretical framework. The study indicates the directions on hospital management, mental health services, policy making, and social work to meet the mental health needs of the inpatients and staff from temporary shelter hospitals like Fangcang in Wuhan during the COVID-19 pandemic.