Objective: The tendency toward unrealistically optimistic self-serving biases, known as trait self-enhancement, has been associated with both adaptive benefits and negative social consequences. This study explored these potential benefits and costs in the context of conjugal bereavement. Method: The study included 94 individuals who had experienced the death of a spouse 1.5–3.0 years prior. The sample (62 female, 32 male) ranged in age from 37 to 60 (M = 51.45, SD = 6.08). To examine benefits, we used relatively objective measures of overall adjustment: structured clinical interviews and ratings from participants’ close friends and relatives. To examine social adjustment, we examined friends’/relatives’ ratings of the quality of social interactions and the possible mediating roles of perceived loneliness and friend/relative ratings. Results: Trait self-enhancement was uniformly associated with positive adjustment: relatively lower symptom totals, and friend/relative ratings of both overall better adjustment and better social adjustment. Self-enhancers’ low loneliness was found to mediate reduced symptoms. Also, friends’/relatives’ ratings of social functioning appeared to mediate selfenhancers’ reduced loneliness. Conclusions: These findings provide further empirical data to challenge the longstanding assumption that inaccurate self-perception is inherently maladaptive. Authentic benefits may result from mistaken perceptions of oneself by influencing the experience of loneliness and how one is seen by close friends/relatives. Self-enhancement may be an adaptation that provides clinically relevant advantages.