Optimism, hopefulness about the success of future endeavors, is widely heralded as a driver of individual and societal achievement. Yet decades of work in psychological science have revealed that optimism declines throughout early childhood. Why does optimism decline with age? In this article, we integrate insights from cognitive, computational, social, and neural perspectives to discuss three candidate mechanisms through which optimism declines with age: Learning from experience, changing theories of success and wishful thinking, and valenced learning biases shifting over time. We argue that declining optimism across childhood is best characterized by changes in children’s theories and valenced learning biases that can be sped up or slowed down by first-person and social experience across development. This novel framework suggests that optimism should be conceptualized not solely as an individual trait, but also as an adaptive bias that signals the nature of one’s environment. Based on this framework, we propose a definition of optimism that unifies research across disparate subfields and recommend future lines of inquiry.