Objective: Higher levels of optimism have been linked with positive health behaviors, biological processes, and health conditions that are potentially protective against cognitive impairment in older adults. However, the association between optimism and cognitive impairment has not been directly investigated. We examined whether optimism is associated with incident cognitive impairment in older adults. Methods: Data are from the Health and Retirement Study. Optimism was measured by using the Life Orientation Test-R and cognitive impairment with a modified version of the Telephone Interview for Cognitive Status derived from the Mini-Mental State Examination. Using multiple logistic regression models, we prospectively assessed whether optimism was associated with incident cognitive impairment in 4624 adults 65 years and older during a 4-year period. Results: Among participants, 312 women and 190 men developed cognitive impairment during the 4-year follow-up. Higher optimism was associated with decreased risk of incident cognitive impairment. When adjusted for sociodemographic factors, each standard deviation increase in optimism was associated with reduced odds (odds ratio OR] = 0.70, 95% confidence interval CI] = 0.61â€”0.81) of becoming cognitively impaired. A dose-response relationship was observed. Compared with those with the lowest levels of optimism, people with moderate levels had somewhat reduced odds of cognitive impairment (OR = 0.78, 95% CI = 0.59â€”1.03), whereas people with the highest levels had the lowest odds of cognitive impairment (OR = 0.52, 95% CI = 0.36â€”0.74). These associations remained after adjusting for health behaviors, biological factors, and psychological covariates that could either confound the association of interest or serve on the pathway. Conclusions: Optimism was prospectively associated with a reduced likelihood of becoming cognitively impaired. If these results are replicated, the data suggest that potentially modifiable aspects of positive psychological functioning such as optimism play an important role in maintaining cognitive functioning.