Breast cancer can seriously disrupt a person's important life goals. As such, the ability to adjust one's goals may be critical for well‐being. The present study investigated the relationships between disengagement/reengagement capacity and well‐being among women with breast cancer, as well as several potential mechanisms (intrusive thoughts, life purpose, and physical activity) that could explain these relationships. The sample consisted of 230 women with early‐stage (n = 172) or late‐stage (n = 58) breast cancer, who were followed prospectively for 8 months. Well‐being measures consisted of global mental health, perceived physical health, positive/negative affect, and sleep efficiency. Disengagement capacity did not predict any outcome variable. In contrast, reengagement capacity prospectively predicted changes in global mental health, positive affect, negative affect, sleep efficiency, life purpose, and physical activity. Life purpose mediated the prospective relationship between reengagement capacity and multiple aspects of well‐being. The relationships between purpose and positive/negative affect were reciprocal over time. Results also suggested that physical activity is not a mediator, but is in fact a result of the effect of reengagement capacity on well‐being. The results demonstrate that reengagement capacity is important for well‐being among women with breast cancer.