Leisure may potentially play a key role in rehabilitation counseling, including psychiatric rehabilitation. Based on recovery and positive psychology frameworks in which meaning-making is a central concept, this study examined the role of leisure-generated meanings (LGMs) experienced by culturally diverse individuals with mental illness in potentially helping them better cope with stress, adjust to and recover from mental illness, as well as feel more actively engaged in life. One-on-one survey interviews were conducted with African (n = 35), Hispanic/Latino (n = 28), Caucasian (n = 28), and Asian (n = 8) American adults (aged between 23 and 78) (total n = 101) with mental illness (e.g., bipolar disorder, n = 32; major depression, n = 23; schizophrenia, n = 22) in Philadelphia, Pennsylvania. Using general linear modeling, we found that LGMs significantly predicted the adjustment to and recovery from mental illness, leisure stress-coping, leisure satisfaction, and perceived active living positively, and lower leisure boredom. The findings have implications for psychiatric rehabilitation to better support persons with mental illness from a strengths-based, meaning-centered, and active-living promotion perspective in which leisure seems to play an important role.