Background Digital communication technologies are playing an important role in the health communication strategies of governments and public health authorities during the COVID-19 pandemic. The internet and social media have become important sources of health-related information on COVID-19 and on protective behaviors. In addition, the COVID-19 infodemic is spreading faster than the coronavirus itself, which interferes with governmental health-related communication efforts. This jeopardizes national public health containment strategies. Therefore, digital health literacy is a key competence to navigate web-based COVID-19–related information and service environments. Objective This study aimed to investigate university students’ digital health literacy and web-based information-seeking behaviors during the early stages of the COVID-19 pandemic in Germany. Methods A cross-sectional study among 14,916 university students aged ≥18 years from 130 universities across all 16 federal states of Germany was conducted using a web-based survey. Along with sociodemographic characteristics (sex, age, subjective social status), the measures included five subscales from the Digital Health Literacy Instrument (DHLI), which was adapted to the specific context of the COVID-19 pandemic. Web-based information-seeking behavior was investigated by examining the web-based sources used by university students and the topics that the students searched for in connection with COVID-19. Data were analyzed using univariate and bivariate analyses. Results Across digital health literacy dimensions, the greatest difficulties could be found for assessing the reliability of health-related information (5964/14,103, 42.3%) and the ability to determine whether the information was written with a commercial interest (5489/14,097, 38.9%). Moreover, the respondents indicated that they most frequently have problems finding the information they are looking for (4282/14,098, 30.4%). When stratified according to sociodemographic characteristics, significant differences were found, with female university students reporting a lower DHLI for the dimensions of “information searching” and “evaluating reliability.” Search engines, news portals, and websites of public bodies were most often used by the respondents as sources to search for information on COVID-19 and related issues. Female students were found to use social media and health portals more frequently, while male students used Wikipedia and other web-based encyclopedias as well as YouTube more often. The use of social media was associated with a low ability to critically evaluate information, while the opposite was observed for the use of public websites. Conclusions Although digital health literacy is well developed in university students, a significant proportion of students still face difficulties with certain abilities to evaluate information. There is a need to strengthen the digital health literacy capacities of university students using tailored interventions. Improving the quality of health-related information on the internet is also key.