The present study was conducted with the aim to examine the relationship between internet addiction and psychological well-being among youth of Kashmir and to find out the difference in both addiction and psychological well-being among youth of Kashmir with respect to gender and residential status. 100 students studying in various colleges of two districts of Kashmir (Srinagar and Ganderbal) completed the Young’s Internet addiction test (Young, 1998) and Ryff’s Psychological well-being scale (Ryff, 1995). Results of the study revealed a significant negative correlation between internet addiction and psychological well-being among youth of Kashmir. Further it was found that there is significant difference in internet addiction among youth of Kashmir with respect to their gender, males were found to be high on internet addiction than their counter parts and no significant difference was found in internet addiction with respect to their residential status. Results also revealed insignificant difference in psychological well-being among male and female youth and regarding their residential status significant difference was found in psychological well-being, urban youth were found to be high on the levels of psychological well being as compared to rural youth. The study will be helpful in highlighting the effect of internet addiction among youth which is becoming a menace day by day for society.