A need for a focus shift from increased longevity to ability and experienced wellbeing is evident to enable older adults to stay active in and engaged with society for longer. The mental health of older adults is a public health issue: mental health problems and disorders are highly prevalent in later life and thereby form a major threat to a full life. Psychosocial interventions aiming to enhance mental health, targeting the general older adult population or certain risk groups, are promising if appropriately implemented. The aim of this chapter is to describe and compare the effect of psychosocial interventions for enhancing mental health in later life. In addition, it illustrates how various aspects of social capital (i.e., social contacts, social participation, and experienced trust, sense of belonging and social support) connect to mental health and mental wellbeing among older adults. Based on a systematic review and meta‐analysis, the effects of psychosocial interventions on various mental health outcomes (e.g., life satisfaction, quality of life, functioning level, depressive symptoms) are presented and discussed. Equally important, the systematic review points out the scarce research base of psychosocial interventions, with few included studies and characterized by a small or no effect. Among the evaluated intervention types, social activities involving some form of volunteering or giving were the most promising; they significantly enhanced positive mental health, life satisfaction, and quality of life, as well as reduced depressive symptoms when compared to no‐intervention controls. Further, the subjective importance of psychosocial activities for the maintenance of mental health and wellbeing is highlighted and various components of social capital are identified as significant predictors for mental health among older adults.