Benefits from an improved understanding of mental health of young adults, particularly students, affecting their academic performance are likely to be numerous. Thus, we aimed at evaluating anxiety and depression among annual and semester university students of Lahore, Pakistan. A cross-sectional study of 7 months duration was designed by enrolling a total of 404 students from two private and two public sector universities of Lahore. We found significant differences in frequency distribution with regard to age (p = 0.003), marital status (p = 0.01), living status (p = 0.004), and reasons affecting of mental health (p = 0.004) between annual and semester system students. Students enrolled in annual system exhibited higher odds of anxiety, mild (OR 2.7, p = 0.019), and extremely severe (OR 2.6, p = 0.002), compared to semester students. In overall assessment of university students, after univariate analysis, multivariate analysis demonstrated significant association of depression with male students (OR 2.3, p = 0.001), age ≤ 22 years (OR 2.8, p = 0.0005) and living status (OR 5.96, p = 0.0005). Similarly, as for anxiety, only male students demonstrated higher odds of anxiety (OR 2.8, p = 0.0005). As expected, compared to a single reason, multiple reasons affecting student’s mental health demonstrated significant association with all three determinants of mental health, i.e., stress (OR 0.36, p = 0.0005), anxiety (OR 0.31, p = 0.0005), and depression (OR 0.5, p = 0.0005). Taken together, these data suggested higher prevalence of anxiety among annual system students, mainly because of studies, while in overall assessment male students and students at an early stage of their life at the university were susceptible to anxiety and depression, probably due to multiple reasons affecting their mental health.