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Objectives: The study aimed: (1) to compare levels of well-being and distress in older adults living in nursing homes with those living in community; and (2) to test the feasibility of a positive narrative intervention for improving well-being versus a control art-and-craft intervention in a nursing home setting. Methods: Sixty older adults participated in the study (M = 77.37; SD = 5.00), Male = 20 (33.3%). In Study 1, 30 adults living in nursing homes were compared with 30 community-dwellers using the following measures: Satisfaction with Life Scale, Psychological Well-being Scale, Social Well-being Scale, Geriatric Depression Scale, and sleep quality. In Study 2, the same 30 adults living in nursing homes were allocated to a positive narrative intervention group (N = 20) or to a control group (N = 10) and assessed at post-intervention. Results: In Study 1, older adults in nursing homes presented more depression and impairments in well-being, compared to community-dwellers. In Study 2, at post-treatment, individuals assigned to the narrative intervention reported significantly increased well-being and sleep quality. Conclusions: Although preliminary, results showed that older adults living in nursing homes are more vulnerable than community-dwellers. These patients experienced improvement when given a short group positive narrative intervention applicable in nursing homes. Clinical Implications: A brief group intervention based on fairy tales yielded improvements in well-being and sleep quality in nursing home residents, who enjoyed and appreciated its content. These promising results need to be confirmed by future randomized controlled trials. © 2017 Taylor & Francis