The Internet, as an essential modern means of obtaining information and establishing communication with others, it becomes an increasingly important element of human life. However, the Internet can become problematic if its use is excessive; research in possible causes and effects of Internet addiction is continuing. This particular study examined the correlation between Internet addiction, loneliness and self-esteem on 369 (176 male and 183 female) university students drawn from Addis Ababa University were selected by using multistage sampling. Data were gathered on the demographic characteristics; Internet addiction, loneliness, and self-esteem by a self- report instrument with three parts including Personal Information Questionnaire, Young's Internet Addiction Scale, UCLA Loneliness Scale, and Rosenberg Self- esteem Scale. The data were analyzed using SPSS version 16 computer software. Both descriptive and inferential statistics were used to analyze the data. More importantly Bi-variate techniques, independent sample T-Test and Analysis of Variance (ANOVA) were used for continuous variables; Pearson product moment correlation was used for measuring associations. All correlations and tests for variation were tested for statistical significance at p-value