Most countries have been struggling with the spread of the COVID-19 pandemic imposing social isolation on their citizens. However, this measure carried risks for people's mental health. This study evaluated the psychological repercussions of objective isolation in 1,006 Italians during the first, especially strict, lockdown in spring 2020. Although varying for the regional spread-rate of the contagion, results showed that the longer the isolation and the less adequate the physical space where people were isolated, the worse the mental health (e.g., depression). Offline social contacts buffered the association between social isolation and mental health. However, when offline contacts were limited, online contacts seemed crucial in protecting mental health. The findings inform about the potential downsides of the massive social isolation imposed by COVID-19 spread, highlighting possible risk factors and resources to account for implementing such isolation measures. Specifically, besides some known factors such as physical space availability, the local contagion rate is critical in moderating the link between social isolation and mental health issues, supporting national policies implementing regional tiers of restriction severity.