In this chapter we present an overview of a variety of applications in Indian psychology in the fields of mental health and psychological well-being. A most prominent application is found in the Yoga-Sūtras of Patanjali. Its aim is to provide a radical remedy for suffering (duḥkha) that pervades the human condition. Persistent effort (abhyāsa) in attaining control over the constant fluctuations of the mind, and cultivating the habit of non-attachment (vairāgya) are suggested its basic means along with physical postures and breathing exercises. According to Patanjali, suffering results primarily from misconstrued notions of the self, and when the fluctuations of the mind are completely controlled, the true self, which is blissful in nature, is revealed. There are several implications of this basic model, which are explained in subsequent sections of this chapter. The first implication is that the realization of the blissful true self, and the resulting cessation of suffering, suggests itself as a supreme goal for human development. A pedagogic implication which naturally follows from the above is that self-realization should be recognized as the highest good (niḥśreyasa) over and above self-actualization and resulting worldly success and prosperity (abhyudaya). Correspondingly, an implication for therapy is that it should aim at a complete transformation of the individual leading to the transcendence of the ego, rather than a mere adjustment of the ego. After a brief account of ways for preventing illness as presented in Patanjali’s Yoga and in the medical system of Āyurveda, we present a brief discussion of the potential relevance of Indian psychology to psychotherapeutic practices as explained particularly by Michael Miovic and Alok Pandey. The last section points out the convergence between Indian psychology and the newly emerging field of positive psychology.