Objectives: To examine the effects of reminiscence therapy on psychological well-being, depression, and loneliness among institutionalized elderly people. Methods: In an experimental study design, 92 institutionalized elderly people aged 65 years and over were recruited and randomly assigned to two groups. Those participants in the experimental group received reminiscence therapy eight times during 2 months to examine the effects of this therapy on their psychological well-being. Results: After providing the reminiscence therapy to the elderly in the experimental group, a significant positive short-term effect (3 months follow-up) on depression, psychological well-being, and loneliness, as compared to those in the comparison group was found. Conclusions: Reminiscence therapy in this study sample improved socialization, induced feelings of accomplishment in participants, and assisted to ameliorate depression.