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Optimism is associated with positive outcomes in relationships in general, possibly as a result of processes that promote and maintain Psychological Well-being. The aim of this study was to investigate the relationship between Optimism and Psychological Well being. It also investigated the difference between Hindu and Muslim, male and female Adolescents on Psychological Well-Being and Optimism. For this study 120 Adolescents were selected from Aligarh Muslim University, comprises 60 Hindu male & female and 60 Muslim male & female through random sampling. Pearson product moment correlation was also used for measuring the relationship between Optimism and Psychological Well-being, t-test was used to know the difference between male and female & Hindu and Muslim adolescents. Result shows that there is significant positive correlation between optimism and psychological well-being and there was insignificant difference between male and female adolescents on optimism and psychological well-being.