Background Psychological health is as an important contributor to recovery after cardiovascular disease, but the roles of both optimism and depression in stroke recovery are not well characterized. Methods and Results A total of 879 participants in the SRUP (Stroke Recovery in Underserved Populations) 2005 to 2006 Study, aged ≥50 years, with incident stroke admitted to a rehabilitation facility were included. Optimism was assessed by the question: “Are you optimistic about the future?” Depression was defined by Center for Epidemiologic Studies Depression scale score >16. Participants were categorized into 4 groups: optimistic/without depression (n=581), optimistic/with depression (n=197), nonoptimistic/without depression (n=36), and nonoptimistic/with depression (n=65). Functional Independence Measure scores were used to assess stroke outcomes at discharge, 3 months after discharge, and 1 year after discharge with adjusted linear mixed models to estimate score trajectories. Participants were a mean age of 68 years (SD, 13 years), 52% were women, and 74% were White race. The optimistic/without depression group experienced the most recovery of total Functional Independence Measure scores in the first 3 months, 24.0 (95% CI, 22.5–25.4), followed by no change in the following 9 months, −0.3 (95% CI, −2.3 to 1.7), similar to the optimistic/with depression group with rapid recovery in 0 to 3 months, 21.1 (95% CI, 18.6–23.6) followed by minimal change in 3 to 12 months, 0.7 (95% CI, −2.8 to 4.1). The nonoptimistic groups demonstrated slow but continued recovery throughout the 12‐month period, with overall change, 25.4 (95% CI, 17.6–33.2) in the nonoptimistic/without depression group and 17.6 (95% CI, 12.0–23.1) in the nonoptimistic/with depression group. There was robust effect modification between optimism and depression ( P _interaction <0.001). Conclusions In this longitudinal cohort, optimism and depression are synergistically associated with functional recovery after stroke. Measuring optimism status may help identify individuals at risk for worse poststroke recovery.