Counterfactual thinking—the capacity to reflect on what would, could, or should have been if events had transpired differently—is a pervasive, yet seemingly paradoxical human tendency. On the one hand, counterfactual thoughts can be comforting and inspiring (Carroll & Shepperd, Chapter 28), but on the other they can be anxiety provoking and depressing (Zeelenberg & Pieters, Chapter 27). Likewise, such thoughts can illuminate pathways toward better future outcomes (Wong, Galinsky, & Kray, Chapter 11), yet they can also promote confusion and lead us astray (Sanna, Schwarz, & Kennedy, Chapter 13). The first part of this chapter focuses on work that supports the prevailing Zeitgeist in the counterfactual thinking literature: Counterfactual thinking is beneficial. The second part of the chapter, however, strikes a more cautionary tone by reviewing work that describes some deleterious consequences of counterfactual thinking. We conclude by offering a tentative reconciliation of these conflicting perspectives and suggesting directions for future research.