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In 1988, we published an article that challenged the notion that accurate perceptions of self and the world are essential for mental health (Taylor & Brown, 1988). We argued instead that people's perceptions in these domains are positively biased and that these positive illusions promote psychological well-being. In the current article, we review our theoretical model, correct certain misconceptions in its empirical application, and address the criticisms made by Colvin and Block.