Background Mental health issues, including psychological distress, are prevalent among university students, negatively impacting their academic, social, and physical well-being. Poor dietary habits and unhealthy lifestyle behaviors such as low physical activity and internet addiction have been linked to mental health problems. However, research exploring these associations among university students, particularly in Pakistan, remains limited. Objectives To investigate the relationship between psychological distress, diet quality, physical activity, and internet addiction among undergraduate university students in Pakistan. Methods This cross-sectional observational study was conducted at public universities in Lahore, Pakistan, from September to November 2021, using a stratified random sampling method. Participants (n=400; aged ≥18 years) completed validated questionnaires assessing psychological distress (Kessler K10), diet, physical activity, internet addiction (IAT), and sleep quality (PSQI). Descriptive statistics, chi-square tests, and correlation analyses were performed using SPSS 23. Results Psychological distress was prevalent in both boarder (54.2%) and non-boarder (45.7%) students. Significant associations were observed between psychological distress and dietary habits (e.g., meal frequency, fruit/vegetable intake) and lifestyle variables (e.g., physical activity, sleep quality, internet addiction). Lower fruit and vegetable intake, poor sleep quality, and mild-to-moderate internet addiction correlated with higher distress levels. Residential status showed no significant association with psychological distress. Conclusions Diet quality and lifestyle habits significantly influence psychological distress among university students in Pakistan, irrespective of residential status. Findings highlight the need for longitudinal studies and targeted interventions to address mental health challenges and promote healthier dietary and lifestyle practices.