How Internet addiction affects happiness of university students in terms of their cognitive and emotional resources was not adequately investigated. One of the inner resources of life satisfaction and happiness is defined as psychological capital (PsyCap), under the paradigm of positive psychology. PsyCap consists of four main sub-factors: hope, resilience, self-efficacy, and optimism. The major purpose of this study is to examine the role of Internet addiction and social media membership on PsyCap. The interaction between social media membership and Internet addiction was also investigated. The study employed a quantitative approach of scientific inquiry which combined descriptive, relational, and comparative models. The sample consisted of 209 students at a medium size state university in Turkey. Internet Addiction Inventory (Young, 1998) and Psychological Capital Questionnaire (Luthans et al., 2007) were employed as data gathering tools. A demographic data sheet was also used for determining the reasons and the amount of time for using Internet. In analyzing data, a set of correlation, analysis of variance, and multiple regression techniques were conducted. The results were complex. Internet addiction and PsyCap were negatively correlated. Students who spend more time on the Internet and social media, who are male and use Internet for daily communication were more likely to have higher Internet addiction scores. PsyCap can be significantly predicted by academic success, Internet addiction and having a blog. Although social media using time was not interacted with PsyCap, social media membership leaded to both higher PsyCap and higher Internet addiction. Especially, PsyCap scores of the students who had Linkedln and YouTube accounts were significantly higher. Internet addiction scores were also higher for students having Twitter, YouTube, Pinterest, and Linkedln accounts. It can be concluded that Internet addiction decreases PsyCap. Social media membership increases both Internet addiction and PsyCap.