Present study is an effort to explore relationship between positive thinking, coping with daily stressors and health outcomes. The researcher hypothesized that those who have positive thinking will appraise stressors less threatening, use problem focused coping strategies and will have better health as compared to the negative thinkers. Research was divided into two parts: Study I and Study II. In study I, the researcher developed and validated a Daily Stressor Scale (DSS) for university teachers. In order to develop the scale, countrywide data was collected from the university teachers. To make the data representative, 264 university teachers from the major universities of all provinces of Pakistan, Federal area and Azad Jammu & Kashmir were included in the study. A 27 items Daily Stressor Scale (DSS), having four subscales, was validated by factor analysis. The psychometric property of DSS was established by convergent validly. Separate norms were developed for total scale, subscales and for males and females. In study II, relationships among positive thinking, coping with DSS and health were analyzed in a sample of 182 faculty members, selected randomly, from University of Education. Positive thinking, operationalized as optimism, was measured through Life Orientation Test–Revised (LOT-R, Scheier, Carver & Brigades, 1994), coping with Brief Cope (Carver, 1997) and health with General Health Questionnaire (Goldberg, 1972). The results indicated significant relationships between positive thinking, daily stressors, and problem focused coping and health. Positive thinking accounted for 42% of variance in stress reduction, 12% in effective coping and 20% in health and wellbeing. Optimism and gender were the significant predictors of stress,coping and health. The findings were congruent with Fredrickson’s Broaden and Build Theory of Positive Emotions and Lazarus Model of Transactional Approach to Stress. Implications for clinical, counseling and educational settings, institutions, family and community are discussed.