Nostalgia has suffered a poor reputation in the field of psychology, but recent evidence suggests that this negative view is undeserved. At present, nostalgia is considered a predominantly positive emotion. It is also deemed a vital intrapersonal resource that contributes to psychological equanimity, and has potent implications for motivation and behaviour. Moreover, nostalgia is prevalent, universal, and experienced by persons of virtually all ages. The purpose of this chapter is to document the remarkable rehabilitation of the construct. We do so by reviewing recent advances in two key areas of nostalgia research. First, we consider the nature of nostalgia, including its definition and content, as well as its similarities and differences with other emotions. Second, we present an overview of nostalgia’s key psychological functions: social, self-oriented, existential, and future-oriented. We show that nostalgia can be distinguished from other emotions in terms of its unique prototypical features, narrative content, affective signature, and antecedent appraisals. Above all, nostalgia serves important psychological functions, dispelling its negative caricature as a feeble and futile retreat into one’s past. We conclude by discussing the limits of nostalgia as a psychological resource.