Abstract Background Coronavirus-19 (COVID-19) is a highly contagious disease caused by acute respiratory syndrome that can negatively impact physical activity as well as mental health of people in the world. Since Iran is one of the countries deeply affected by the COVID-19 pandemic, therefore, the aim of this study was to investigate the impact of the COVID-19 pandemic restrictions on physical activity behaviours, as well as on mental health indicators among Iranian people. Methods In this cross-sectional study, 335 participants were included (155 males, mean age = 30.06 ± 14.58 years). Participants were selected through the convenience sampling from different parts of Iran mainly through virtual social networks and filled out an electronic questionnaire in the form of Google Form online survey measuring physical activity behaviours (The International Physical Activity Questionnaire; IPAQ; Short Form) and two mental health indicators–self-esteem (Rosenberg self-esteem scale) and social physical anxiety (7-items social physique anxiety scale). The questionnaires were provided to the participants in the spring of 2021 for 15 days and they were asked to answer it in two periods before the outbreak of coronavirus (winter 2020) and the period during the outbreak of coronavirus (spring 2021). Results The results showed that participants reported significant differences from before to during the pandemic in all three variables of physical activity (significant decreases), self-esteem (significant decreases), and social physical anxiety (significant increases) regardless of participants’ gender. The results of correlation test between changes in physical activity and changes in mental health indicators showed that COVID-19 pandemic negatively impacted self-esteem and social physical anxiety. However, we have not found any significant association of physical activity’s change with social physical anxiety or self-esteem’s changes before and during the pandemic. Conclusions The findings of the present study indicate a detrimental effect of the COVID-19 pandemic on the physical activity and mental health among Iranian people. Public policies aiming to buffer the negative impact on COVID-19 Iranians’ health are urgently needed.