As the positive psychology movement gains momentum, both within psychology and in the broader culture, it becomes increasingly important to ensure that the complexity of individual personality and psychological processes do not get lost in a “one-size-fits-all” approach to improving human functioning. In this article, we consider some of the ways that the costs and benefits of different kinds of optimism and pessimism may vary across different individuals, situations, and cultural contexts. We use defensive pessimism research to illustrate that there are times when pessimism and negative thinking are indeed positive psychology, as they lead to better performance and personal growth. We also consider the ways in which dominant American culture—and research in psychology—may underestimate some of the costs of optimism. © 2002 Wiley Periodicals, Inc. J Clin Psychol 58: 993–1001, 2002.