Frequency of cannabis use and cognitive vulnerabilities such as anxiety sensitivity (i.e., the fear of bodily sensations), have been independently linked with poor physical health, however the interplay between these health-mental health processes may compound poor physical health and functioning in cannabis users. Thus, the current study evaluated the direct and interactive effects of cannabis use frequency and anxiety sensitivity on physical health and functioning among cannabis-using veterans. Participants (N = 138) were post-9/11 United States veterans recruited from a Veterans Affairs hospital who reported cannabis use in the past six months. Cannabis use frequency in the past month and anxiety sensitivity were significantly negatively correlated with perceived overall physical health. There was a significant interaction between cannabis use frequency and anxiety sensitivity, such that more frequent cannabis use was associated with poorer overall health and role functioning due to health problems among veterans with higher anxiety sensitivity (but not lower). Findings suggest that anxiety sensitivity is a cognitive vulnerability linked to poor perceived physical health and impairment among frequent cannabis users and could be targeted, along with cannabis use, for health-promotion in cannabis users.