This review examines the effects of exercise and physical activity on the psychological well-being of older adults. Unlike most of the literature in this area, this review focuses primarily on those psychosocial outcomes that are generally positive in nature. As well as considering the overall effects of physical activity, the roles of program length, subject sex, age, physical fitness, and measurement are considered. Overall, the results of the 38 studies reviewed are overwhelmingly positive, with the majority reporting positive associations between physical activity and psychological well-being. This relationship appears to be moderated by the length of the exercise programs; longer programs consistently report more positive results. There is little evidence that exercise has differential psychological effects on men and women or on individuals of differing ages. Whereas training protocols seem to result in significant changes in physical fitness and well-being, such improvements appear to be unrelated. The review concludes with a brief discussion of possible mechanisms underlying the physical activity/psychological health relationship, and several directions are recommended for future research.