Previous research has shown that optimism is a prospective predictor of successful adaptation to stressful encounters. In a sample of 126 Singaporeans this study investigated the effects of optimism in relation to their implications for the manner in which people deal with the stresses of life. The results, using structural equation modelling, generally provided support for the beneficial effects of an optimistic outlook on life. Specifically, optimism was found to predict positive well-being directly, as well as indirectly through its effects on stress. The results of this study also provided evidence for the differential use of specific coping tactics by optimists. However, the use of such coping tactics did not mediate the relationship between optimism and well-being. In brief, these findings suggest that optimism predicts positive well-being directly, and at the same time reduces the experience of stress.