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The COVID-19 pandemic has been spreading globally since December 2019, bringing with it anxieties, mortal risk, and agonizing psychological suffering. This study aimed to explore the relationship between maladaptive daydreaming (MD)—an addictive mental behavior to vivid fantasy associated with distress and functional impairment—and forced COVID-19 pandemic-related self-isolation and quarantine. Previous literature indicated that individuals employ MD for the regulation of distress and boredom, wish fulfillment, and entertainment experiences. The literature on the impact of the COVID-19 pandemic on mental health identifies a flareup in psychological difficulties in the general population. In this study we explored the associations between the pandemic threat and mental health indices among individuals with MD. We surveyed 1,565 adults from over 70 countries who responded to calls for participants posted in online MD communities and other general social media sites. Probable MD was determined based on an empirically derived cut-off score on a pertinent measure. After controlling for sociodemographic variables, a series of MANCOVAs, followed by post-hoc ANCOVAs, revealed that individuals with probable MD who were observing lockdown restrictions reported having spent more time in fantasy, experienced more intense and vivid daydreaming, and had a stronger urge to daydream than other participants. Similar statistical procedures indicated that, individuals with probable MD who reported pre-existing anxiety and depression disorders described a greater urge to daydream due to the pandemic and greater difficulty to control this addictive behavior. Compared to individuals with likely normal daydreaming, individuals with suspected MD reported more pandemic-attributed deterioration on a wide array of psychological distress indices. Our data show that the current worldwide pandemic threat is connected with an elevated intensity of this addictive form of mental activity, and that MD is associated with the exacerbation of psychological distress and dysfunction rather than with beneficial regulation of the experienced stressor.