As social media use is rising among adolescents, the issue of whether this use leads to positive or negative outcomes warrants greater understanding. This article critically reviews the literature related to this important topic. Specifically, we examine how social media use affects social connectedness in terms of three elements of adolescent development: sense of belonging, psychosocial wellbeing, and identity development and processes. Mixed findings are reported regarding the role that social media plays in fostering social connectedness, which suggests that young people may experience both positive and negative psychological outcomes. As a result, this article argues that online tools create a paradox for social connectedness. On one hand, they elevate the ease in which individuals may form and create online groups and communities, but on the other, they can create a source of alienation and ostracism. This article contributes to ongoing discourse in the area of educational and developmental psychology, and has implications for researchers and practitioners working with adolescents.