While the prevalence rates of Internet addiction (IA) amongst young people during the pandemic are disturbing, few studies have investigated the risk and protective factors of IA in Hong Kong university students under COVID-19. In this study, we examined the relationship between COVID-19-related stress and IA and the role of psychological morbidity and positive psychological attributes in the relationship. In summer 2022, 978 university students completed a survey assessing pandemic-related stress, psychological morbidity, and positive psychological attributes. While psychological morbidity was indexed by depression, post-traumatic stress disorder, and suicidal behavior, positive psychological attributes included life satisfaction, flourishing, adversity beliefs, emotional competence, resilience, and family functioning measures. Results showed that stress and psychological morbidity positively predicted IA, and psychological morbidity mediated the association between stress and IA. Positive psychological attributes negatively predicted stress and IA, and mediated the connection between stress and IA. Positive psychological attributes moderated the mediating effect of psychological morbidity on the relationship between stress and IA. In addition to theoretical contributions, this study contributes to IA prevention and treatment: reducing psychological morbidity and promoting positive psychological attributes are promising strategies to address IA issues in young people.