BackgroundDespite over two years of COVID-19 worldwide, the outbreak of the Omicron variant has given rise to an unprecedented surge of infection with diverse lockdown measures implemented globally. Whether the emergence of a new wave of COVID-19 could further affect mental health in the population after nearly two years of the pandemic remains to be addressed. Furthermore, whether changes in smartphone overuse behaviours and physical activity – both of which are particularly relevant to young people – would together contribute to changes in distress symptoms during this wave of COVID-19 was also examined.MethodsA total of 248 young people from an ongoing household-based epidemiological study in Hong Kong who completed their baseline assessments prior to the Omicron variant outbreak, i.e., fifth wave of COVID-19 (July–November 2021), were invited for a 6-month follow-up study during this wave of infection (January–April 2022) (mean age = 19.7 years, SD = 2.7; 58.9% females). At both time points, levels of global distress symptoms, perceived stress, smartphone overuse, frequency of engagement in vigorous physical activity, and other potential risk and protective factors were assessed.ResultsThe proportion of young people presenting moderate-to-severe distress (6-item Kessler Psychological Distress Scale ≥ 5) significantly increased from 45.6 to 54.4% during the fifth wave of COVID-19 (p< 0.010). Significantly increased levels of smartphone overuse and reduced days of vigorous physical activity were also observed during the fifth wave. Notably, increased smartphone overuse and reduced physical activity both additively and interactively contributed to elevated distress at 6 months, even after accounting for demographic characteristics, psychiatric history, childhood adversity, as well as baseline distress symptoms, resilience, and recent personal stressors.ConclusionsThe findings suggest that the emergence of a new wave of COVID-19, specifically the Omicron outbreak, can further aggravate mental distress even after a protracted period of the pandemic. Awareness of the dynamic nature of COVID-19 is necessitated to address the pressing mental health needs of populations. Supporting young people in healthier patterns of smartphone use and physical activity can be helpful.Supplementary InformationThe online version contains supplementary material available at 10.1186/s12888-023-04933-3.