National statistics indicate that the rate of incarceration is rising (Bureau of Justice Statistics, 2006). A high percentage of these inmates exhibit mental health issues and substance dependence upon entry into correctional facilities. As 95% of inmates are released back into the community, the period of incarceration is an optimal time to address inmates' mental illness and substance dependence. It is important that research investigate mutable psychological variables to develop effective interventions that may help offenders upon release. One such promising variable is optimism. Research with community samples indicate that optimism, the expectation that good, rather than bad things will happen, is related to positive mood, perseverance in the face of adversity, and better mental and physical health (Carver & Scheier, 2002). Current research has found evidence that it is possible to help individuals increase their level of optimism. Given the positive outcomes routinely associated with high optimism, fostering optimism may be beneficial in the inmate population. However, before implementing interventions designed to increase optimism, it is important to understand how this variable operates in an inmate population. Drawing on data from an ongoing longitudinal study, the present research study examined the relationship between optimism and several variables of interest in a sample of 523 inmates housed in an urban jail. Participants completed measures of theoretical and clinical interest upon entry to the jail (Time 1), upon release or transfer from the jail (Time 2, n = 268), and one-year post-release (Time 3, n=244). Direct effects were examined between optimism and treatment seeking, changes in mental health, negative behaviors one-year post-release, and positive behaviors one-year post-release. There was a significant inverse relationship between optimism and negative post-release outcomes (recidivism and drug use). All other relationships were non-significant. In addition to direct effects, alternative models were tested. There was no evidence of a curvilinear nature between optimism and the outcome variables. Psychopathy significantly moderated the relationship between optimism and self-reported treatment seeking and the relationship between optimism and positive post-release; stability in housing and employment. Examination of the nature of the interaction indicated that for low psychopaths, optimism was associated with treatment participation, living in more places during the first year following release, and shorter length of employment. However, for high psychopaths, optimism was related to lower levels of treatment participation, living in fewer places, and longer length of employment.