Lyme Disease, or Lyme Borreliosis, caused by Borrelia burgdorferi and spread by ticks, is mainly known to cause arthritis and neurological disorders but can also cause psychiatric symptoms such as depression and anxiety. We present a case of a 37-year-old man with no known psychiatric history who developed panic attacks, severe depressive symptoms and suicidal ideation, and neuromuscular complaints including back spasms, joint pain, myalgias, and neuropathic pain. These symptoms began 2 years after being successfully treated for a positive Lyme test after receiving a tick bite. During inpatient psychiatric hospitalization his psychiatric and physical symptoms did not improve with antidepressant and anxiolytic treatments. The patient's panic attacks resolved after he was discharged and then, months later, treated with long-term antibiotics for suspected "chronic Lyme Disease" (CLD) despite having negative Lyme titers. He however continued to have subsyndromal depressive symptoms and chronic physical symptoms such as fatigue, myalgias, and neuropathy. We discuss the controversy surrounding the diagnosis of CLD and concerns and considerations in the treatment of suspected CLD patients with comorbid psychiatric diagnoses.