Background: Social distancing requirements due to the COVID-19 pandemic saw a rapid increase in the delivery of telehealth consultations as an alternative to face-to-face health care services. Objective: The aims of this study were to assess the use and acceptability of telehealth during the early stages of the pandemic and identify factors associated with telehealth avoidance during this period. Methods: Data were obtained from waves 4 and 7 of a longitudinal survey designed to assess the impact of the COVID-19 pandemic on the health and behavior of a representative sample of Australian adults. Participants reported on their use or avoidance of telehealth during the assessment period, as well as the mode of telehealth used and acceptability. Results: Approximately 30% of participants reported using telehealth during the assessment periods, with the most common telehealth modality being the telephone. Acceptance of telehealth was generally high and was higher among those who used telehealth compared with those who did not. Approximately 18% of participants reported avoiding health care due to telehealth. Across assessment waves, avoidance was associated with younger age, speaking a language other than or in addition to English, having a current medical diagnosis, and lower levels of telehealth acceptability. Conclusions: While most participants in this study were accepting of telehealth services, there remain barriers to use, especially among those from particular sociodemographic groups. At a population level, avoidance of health services in nearly one in five adults may have considerable long-term impacts on morbidity and potentially mortality. Targeted efforts to promote engagement with telehealth services are critical if these adverse outcomes are to be avoided, particularly during periods when access to face-to-face services may be limited.