Does realism characterize good mental health or maladjustment? In this paper, it is argued that illusory views of social reality, even if self-enhancing, represent a feature of mental distress (not health). Two studies of unselected undergraduates and their same-sex roommates were reported. in Study 1, 466 undergraduates completed a measure of depressive symptoms, and provided global self-ratings; their roommates provided ratings of them. A curvilinear relation between self-other discrepancies and depressive symptoms was detected, in which discrepancies of any kind (even if self-enhancing) were associated with higher depressive symptoms. Using a similar design, Study 2 (N = 143) replicated this finding and extended it to other symptoms and to longitudinal analyses. It is concluded that illusory views of interpersonal reality (even if self-enhancing), far from bolstering adjustment, represent a pattern of attitudes that typifies maladjustment.