Stress is a common problem faced by employees in different industrial sectors. Various researches on BPO industry focus on employee stress. Stress may be due to long working hours, bad working conditions,disorganized work, overall organizational climate is unsuitable. Stress leads to physical and mental problems. Stress may not be negative all the time it can be positive as well. The major impact of stress can be seen on employee motivation. Keeping the motivation theories aside, one of the important parameters of motivation is stress free environment. This study focuses on different types of stress and the impact of stress on employee motivation in BPO sector. BPO sector has a lot of cases on stress due to day and night shifts, long working hours, bad working conditions and various other issues. Stress is beneficial when it is good or raises the employeeproductivity.