Occupational stress has become a serious concern in higher education institutions, particularly among engineering faculty who are required to manage multiple responsibilities such as teaching, research, student mentoring, accreditation work, and administrative duties. When professional demands exceed coping capacity, stress develops and adversely affects both individual well-being and institutional performance. This study examines the major causes of occupational stress among engineering faculty in Tamil Nadu and analyzes how stress influences teaching effectiveness, research productivity, job satisfaction, and psychological well-being. Using a descriptive research design and survey method, data were collected from 150 faculty members across various engineering colleges. The study reveals a significant negative relationship between occupational stress and faculty performance. The paper concludes with institutional and individual strategies to manage stress and enhance academic performance.