Aim: To investigate the influence of perceived stress, optimism and perceived control of internal states on the psychological adjustment of older adults. Method: The sample consisted of 212 older adults, aged between 58 and 103 (M = 80.42 years, SD = 7.31 years), living primarily in retirement villages in Melbourne, Victoria. Participants completed the Perceived Stress Scale, Life Orientation Test-Revised, Perceived Control of Internal States Scale and the World Health Organisation Quality of Life-Bref. Results: Optimism significantly mediated the relationship between older people s perceived stress and psychological health, and perceived control of internal states mediated the relationships among stress, optimism and psychological health. The variables explained 49 of the variance in older people s psychological adjustment. Conclusion: It is suggested that strategies to improve optimism and perceived control may improve the psychological adjustment of older people struggling to adapt to life s stressors.