Objectives There is increasing recognition of the links between mindfulness, decreased stress, and healthier psychological functioning. However, the majority of this research has been conducted in US samples and the mechanisms through which mindfulness decreases stress and increases well-being are not well understood. The aim of this study was to examine the relations between mindfulness and psychological functioning in a general population sample in Sweden. Design This cross-sectional study examined the association of mindfulness and five subscales of mindfulness with depression, anxiety, positive states of mind (PSOM), and perceived health. Methods In the spring of 2007, a random population-based sample of N=1,000 individuals aged 18-60 years in Sweden was contacted by mail with a request to participate in the study. Results Mindfulness and some of its subscales, in particular Acting with awareness and Non-reactivity to inner experiences, were strongly related to PSOM and perceived health, and inversely related to depression and anxiety. Tests of the moderating role of mindfulness showed that the associations of perceived stress with depression and perceived health were diminished for those with higher levels of mindfulness. Conclusions Mindfulness is strongly related to well-being and perceived health. Results suggest that dispositional mindfulness might buffer against the negative influence of perceived stress on psychological well-being. These findings give additional support for the use of mindfulness training as a way of improving psychological functioning among people experiencing stress.