BACKGROUND: Due to the implementation of social distancing and quarantine measures, loneliness has been a major public health concern during the COVID-19 pandemic. However, few studies have examined loneliness in Chinese residents during the COVID-19 epidemic, as well as its associations with mental health needs and services utilization. METHODS: The present study was a cross-sectional survey during the COVID-19 outbreak in China. A total of 7741 adults were invited and completed an online self-administered questionnaire. The Chinese 12-item General Health Questionnaire was used to screen for common mental health problems, loneliness was measured with a single-item self-report question ("How often do you feel lonely in recent days?"), and two standardized questions were used to assess perceived needs for and use of mental health services. RESULTS: In total, 24.2 % of the participants felt lonely in recent days. Age of 16-29 years (OR = 1.36, P = 0.020), marital status of never-married (OR = 1.47, P < 0.001), marital status of "others" (re-married, co-habiting, separated, divorced, and widowed) (OR = 1.72, P < 0.001), having infected family members or close relatives (OR = 1.64, P = 0.026), and having infected colleagues, friends, or classmates (OR = 1.62, P < 0.001) were significant correlates of loneliness. Rates of mental health needs (17.4 % vs. 4.9 %, P < 0.001) and services utilization (2.7 % vs. 1.0 %, P < 0.001) were significantly higher in lonely than not lonely participants. After adjusting for socio-demographic and epidemic characteristics and common mental health problems, loneliness was still significantly associated with mental health needs (OR = 2.50, P < 0.001) and services utilization (OR = 1.62, P = 0.020). CONCLUSIONS: Feelings of loneliness are prevalent among Chinese residents affected by the COVID-19 epidemic and the presence of loneliness is associated with high levels of mental health needs and greater services utilization. Effective measures aiming at preventing or reducing loneliness are potentially beneficial for the mental wellbeing of COVID-19-affected population and reducing the use of the limited mental health service resources during the COVID-19 pandemic.