Comparison of psychosocial adjustment in women with breast cancer (BC) and women with benign breast problems (BBP) has been hampered by a failure to control for age differences between these groups, as well as a failure to assess positive psychosocial adaptation in addition to psychological distress. Age-matched women with breast cancer (n = 80) and benign breast problems (n = 80) completed measures of psychological distress, positive psychosocial adaptation, and general quality of life (QOL). Breast cancer patients had completed primary treatment for breast cancer a mean of 24.6 months prior to participation (range, 6-57 months). Comparison of the BC and BBP groups indicated that the BC group reported (1) poorer physical health and functioning, (2) no differences in psychological distress, and (3) greater positive psychosocial adaptation, such as improved life outlook, enhanced interpersonal relationships, and deeper spiritual and religious satisfaction. Results support the theoretical position that cancer is a transitional event, that is, a traumatic event that alters an individual's assumptive world with the potential to produce long-lasting changes of both a positive as well as negative nature. This underscores the importance of using measures of both psychological distress and positive psychosocial adaptation when assessing psychological adjustment following transitional events such as breast cancer.