The widespread adoption of the smartphone has led to both positive and negative consequences for adolescents’ mental health. This study examines the interplay between smartphone dependence (SPD), generalized anxiety disorder (GAD), and various mental health outcomes among Korean adolescents. Data from the 16th Adolescence Health Behavior Survey (2020), including 54,948 middle and high school students, were analyzed. Adolescents were categorized into three groups based on SPD severity. The GAD-7 scale assessed anxiety, and other factors such as subjective health recognition, happiness, weight control efforts, and body mass index (BMI) were considered. Adolescents with higher SPD exhibited lower academic performance, decreased happiness, and increased perception of stress. GAD levels were positively correlated with SPD, with higher SPD linked to more severe GAD symptoms. Additionally, higher SPD was associated with increased loneliness, sadness, and suicidal thoughts, plans, and attempts as well as a greater likelihood of habitual drug use. Gender differences revealed that females were more prone to sadness, hopelessness, and suicidal thoughts, while males exhibited higher rates of drug use. This study highlights the complex relationship between SPD, GAD, and mental health outcomes among Korean adolescents. Stress recognition was found to mediate the association between GAD and SPD. The process-macro result of the total effect between SPD on GAD and the direct effect of the SPD pathway on GAD was significant; thus, the stress recognition was mediated. Effective interventions should target stress management, especially among adolescents with high smartphone dependence, to mitigate the risk of mental health issues. These findings underscore the importance of addressing smartphone dependence and its impact on the mental well-being of adolescents.