Transition to university is stressful and successful adjustment is imperative for well-being. Historically research on transitional stress focussed on negative outcomes and ill health. This is the first UK study applying a positive psychology approach to investigate the characteristics that facilitate adjustment among new university students. A range of psychological strengths conceptualised as covitality factors, shown individually to influence the stress and subjective well-being (SWB) relationship were assessed among 192 first year UK undergraduates in week three of their first semester and again 6 months later. Path analyses revealed that optimism mediated the relationship between stress and negative affect (a component of SWB) over time, and academic self-efficacy demonstrated significant relationships with life satisfaction and positive affect. Contrary to predictions, stress levels remained stable over time although academic alienation increased and self-efficacy decreased. Optimism emerged as a key factor for new students to adjust to university, helping to buffer the impact of stress on well-being throughout the academic year. Incorporating stress management and psycho-educational interventions to develop strengths is discussed as a way of promoting confidence and agency in new students to help them cope better with the stress at university.