The use of social media within the educational research space has recently received attention for determining interactions within educational contexts. Multidimensional constructs such as student engagement and the learning environment that affect learning have also been pronounced recently. However, the place of social media use within the psychosocial learning environment and dimensions of student engagement in the context of higher education in Ethiopia remain less understood. This article sought to examine the mediating role of social media use by placing it within the formal psychosocial learning environment through moderation. Using a correlational design, 403 randomly selected undergraduate students are involved to examine the direct and indirect effects of psychosocial learning environments and social media use on student engagement employing structural equation modeling, particularly path analysis. Results indicate that social media use mediates the relationship between the learning environment and affective, cotgnitive, behavioral, and agentic engagement. Moreover, social media use appears to be as statistically and positively significant as the dimensions of the learning environment. This finding suggests that social media use can be positioned as a formalized aspect of the psychosocial learning environment rather than an informal and ancillary alternative. These findings challenge the traditional belief that social media is a random, unplanned and optional element of the learning environment. As such, these findings are useful because they inform higher education teachers and administrators to formalize the role of social media use in the designing of structured learning environments in higher education institutions.