Background Social media has become a ubiquitous part of daily life during the COVID-19 pandemic isolation. However, the role of social media use in depression and suicidal ideation of the general public remains unclear. Related empirical studies were limited and reported inconsistent findings. Little is known about the potential underlying mechanisms that may illustrate the relationship between social media use and depression and suicidal ideation during the COVID-19 pandemic. Objective This study tested the mediation effects of social loneliness and posttraumatic stress disorder (PTSD) symptoms on the relationship between social media use and depressive symptoms and suicidal ideation, as well as the moderation effect of age on the mediation models. Methods We administered a population-based random telephone survey in May and June 2020, when infection control measures were being vigorously implemented in Hong Kong. A total of 1070 adults (658 social media users and 412 nonusers) completed the survey. Structural equation modeling (SEM) and multigroup SEM were conducted to test the mediation and moderation effects. Results The weighted prevalence of probable depression was 11.6%; 1.6% had suicidal ideation in the past 2 weeks. Both moderated mediation models of depressive symptoms (χ262=335.3; P<.05; comparative fit index [CFI]=0.94; nonnormed fit index [NNFI]=0.92; root mean square error of approximation [RMSEA]=0.06) and suicidal ideation (χ234=50.8; P<.05; CFI=0.99; NNFI=0.99; RMSEA=0.02) showed acceptable model fit. There was a significantly negative direct effect of social media use on depressive symptoms among older people (β=–.07; P=.04) but not among younger people (β=.04; P=.55). The indirect effect via PTSD symptoms was significantly positive among both younger people (β=.09; P=.02) and older people (β=.10; P=.01). The indirect effect via social loneliness was significant among older people (β=–.01; P=.04) but not among younger people (β=.01; P=.31). The direct effect of social media use on suicidal ideation was not statistically significant in either age group (P>.05). The indirect effects via PTSD symptoms were statistically significant among younger people (β=.02; P=.04) and older people (β=.03; P=.01). Social loneliness was not a significant mediator between social media use and suicidal ideation among either age group (P>.05). Conclusions Social media may be a “double-edged sword” for psychosocial well-being during the COVID-19 pandemic, and its roles vary across age groups. The mediators identified in this study can be addressed by psychological interventions to prevent severe mental health problems during and after the COVID-19 pandemic.