This study examined factors associated with positive psychosocial functioning in 94 cognitively intact nursing home residents reporting poor physical health. It was hypothesized that greater use of meaning-based coping strategies would be associated with higher levels of positive psychosocial functioning. Participants completed an interview containing measures of coping, affect, psychological well-being, depression, and activities of daily living. Findings suggest that meaning-based coping variables (positive reappraisal, perceived uplifts) accounted for significant variance in positive psychosocial variables but not distress variables. In contrast, physical health variables accounted for significant variance in distress but not positive psychosocial variables. Results support the view that the absence of distress does not necessarily imply optimal mental health. Thus, a comprehensive assessment of mental health in older adults requires inclusion of indices of both positive and negative psychological and social functioning.