Background The high prevalence of office stress and its detrimental health consequences are of concern to individuals, employers and society at large. Laboratory studies investigating office stress have mostly relied on data from participants that were tested individually on abstract tasks. In this study, we examined the effect of psychosocial office stress and work interruptions on the psychobiological stress response in a realistic but controlled group office environment. We also explored the role of cognitive stress appraisal as an underlying mechanism mediating the relationship between work stressors and the stress response. Methods and Materials Ninety participants (44 female; mean age 23.11 ± 3.80) were randomly assigned to either a control condition or one of two experimental conditions in which they were exposed to psychosocial stress with or without prior work interruptions in a realistic multi-participant laboratory setting. To induce psychosocial stress, we adapted the Trier Social Stress Test for Groups to an office environment. Throughout the experiment, we continuously monitored heart rate and heart rate variability. Participants repeatedly reported on their current mood, calmness, wakefulness and perceived stress and gave saliva samples to assess changes in salivary cortisol and salivary alpha-amylase. Additionally, cognitive appraisal of the psychosocial stress test was evaluated. Results Our analyses revealed significant group differences for most outcomes during or immediately after the stress test (i.e., mood, calmness, perceived stress, salivary cortisol, heart rate, heart rate variability) and during recovery (i.e., salivary cortisol and heart rate). Interestingly, the condition that experienced work interruptions showed a higher increase of cortisol levels but appraised the stress test as less threatening than individuals that experienced only psychosocial stress. Exploratory mediation analyses revealed a blunted response in subjective measures of stress, which was partially explained by the differences in threat appraisal. Discussion The results showed that experimentally induced work stress led to significant responses of subjective measures of stress, the hypothalamic-pituitary-adrenal axis and the autonomic nervous system. However, there appears to be a discrepancy between the psychological and biological responses to preceding work interruptions. Appraising psychosocial stress as less threatening but still as challenging could be an adaptive way of coping and reflect a state of engagement and eustress.