Reminiscence is proposed as an important activity for well-being in late life but recent reviews highlight the differential outcomes of this behavior. If older adults engage in reminiscing as a natural process, but do so with a ruminative style of thinking, it may actually be detrimental to successful development and well-being. This project explored the relationship between rumination, reminiscence, mood, and psychosocial development. One hundred and fifty community dwelling older adults completed measures assessing these variables. As expected, increased rumination was related to increased depressed mood. Fifty-four of the participants completed a follow-up measure of depressed mood. Rumination also accounted for follow-up depressed mood beyond that explained by time-1 mood. The interaction between rumination and reminiscing significantly predicted future depressed mood after controlling for main effects and baseline mood. Further, this interaction significantly predicted overall psychosocial development. Implications for clinical practice are discussed.