Here's the abstract: Optimism is linked to a range of positive social and cognitive outcomes across development. Yet decades of work in psychological science has revealed that optimism declines throughout early childhood. Despite this well-documented decline, there is no agreed-upon theory that accounts for developmental changes in optimism. In this Perspective, we synthesize cognitive, computational, social and neural evidence and discuss three candidate mechanisms that might underlie declines in optimism with age: learning from experience, changing theories of success and wishful thinking, and shifts in valenced learning biases. We argue that declining optimism across childhood is best characterized by an account that integrates these theories. Specifically, we suggest that environmental factors impact the pace at which children’s theories and valenced learning biases change with age, and consequently the rate at which their optimism declines. This account suggests that optimism should be conceptualized as an adaptive bias that signals the nature of one’s environment and leads to specific recommendations for future lines of enquiry