Considering the current role of technology, this research aims to investigate the impact of the metaverse on social development and psychological well-being in the United Arab Emirates (UAE). The focus remains on Generation Z, as an important portion of the country’s metaverse users. Supported by the technology determinism theory, this research used a structured questionnaire to gather data from 363 respondents. The analysis indicates that metaverse technology significantly impacts social development and psychological well-being. The effect of metaverse technology on social development remained positive, with the p-value at p > 0.000. In addition, metaverse technology also has a significant positive effect on psychological well-being (p > 0.000), with the findings showing strong statistical support for this relationship. These results confirm that metaverse technology plays a significant role in improving both social and psychological facets. Thus, it is concluded that the metaverse creates immersive virtual environments that help unique forms of social interaction and connectivity, confounding geographical barriers. This can improve social skills and communication and promote a strong sense of community. The metaverse offers a directed and engaging space to practice social interactions and gain confidence, indicating its positive, constructive role in society.