The role of sustainability initiatives and niche groups in transitions towards sustainability has received a good deal of attention. However, little is known about the people who make up these groups. This paper discusses their psychological wellbeing – a concept that comprises six elements: self-acceptance, personal growth and development, purpose in life, environmental mastery, autonomy, and positive relations with others. In the study we performed 46 semi-structured interviews with people from 11 sustainability initiatives in five countries across Europe. We find that the groups offer a platform to build and maintain social relations with other, often like-minded, people. While these relations often serve an important motivational function to stay engaged, they are not free of challenges. The interviews show that sustainability initiatives can also provide fertile ground for personal growth and other dimensions of psychological wellbeing. Environmental mastery – and specifically the capacity to cope with global environmental problems beyond individual control – is a major challenge for people engaged in sustainability initiatives. Overall, the data suggests strong links between social engagement and psychological wellbeing. From a theoretical perspective, this paper enriches the transition literature by exploring the role of psychological wellbeing among people engaged in niches.