Social media addiction has previously been linked to compromised mental health and social isolation; however, most studies are cross-sectional or based on convenience samples. The objective of the current study was to assess the extent to which social media addiction predicts compromised mental health and social isolation (including bi-directionality) in a large prospective sample of Danish adults. Data stem from a nationwide longitudinal Danish survey of 1958 adults (aged 16+) conducted in 2020 and 2021. The Bergen Social Media Addiction Scale (BSMAS) was used. Validated scales were used to assess depression, mental wellbeing, and loneliness. A total of 2.3% screened positive for social media addiction. As compared to no symptoms, social media addiction was associated with an elevated risk for depression (OR = 2.71; 95% CI 1.08, 6.83) and negatively with mental wellbeing (coef = −1.29; 95% CI −2.41, −0.16). Similarly, social media addiction was associated with an elevated risk of loneliness (OR = 4.40; 95% CI 1.20, 16.19), and negatively with social network size (coef = −0.46; 95% CI −0.86, −0.06). There is a need for preventive actions against addictive social media use, as this poses significant risk to mental health and social functioning in the working age population.