The COVID-19 crisis has challenged and generated severe impact on the global society, economy, and environment. Under this pandemic context, governments and organizations around the world have issued and strengthened environmental policies and regulations to protect the environment and human health. However, the extant knowledge about how people’s interpretation of environmental policies and regulations influence their psychological well-being in the context of the COVID-19 pandemic is still limited. This study, therefore, investigates the impact of environmental interpretation on psychological well-being with the mediating role of environmentally responsible behavior and the moderating role of psychological contract violation. Using the data from a large sample of 960 residents in China, results of structural equation modeling show a positive relationship between environmental interpretation and psychological well-being, and this relationship is mediated by environmentally responsible behavior. Notably, psychological contract violation has a moderating effect on the indirect effect of environmental interpretation on psychological well-being via environmentally responsible behavior. These findings have several important implications for policymakers in environmental sustainability and pandemic planning.