In a challenge to traditional views of mental health, Taylor and Brown argued that an overly positive or enhanced perception of the self was adaptive, particularly in conditions of extreme adversity. Researchers have tempered this view with evidence linking self-enhancing biases to negative social consequences. This article reports studies examining self-enhancement in the context of civil war in Bosnia (Study 1) and premature conjugal loss (Study 2). In both studies, mental health experts rated self-enhancing individuals as better adjusted than other participants. Self-enhancement proved particularly salutary for bereaved participants who suffered more adverse losses. These effects were evidenced regardless of whether global judgments or structured clinical interviews were used, whether ratings were collected cross-sectionally or longitudinally, and when negative affect was statistically controlled. However, consistent with previous studies, self-enhancers also evoked negative impressions among untrained observers. Limitations and implications for future research are discussed.