While some people have difficulty adjusting to retirement, others seem to adjust easily. The search for theory to explain the source of positive retirement may require research methods to develop theory rather than to test theory. Grounded theory methodology was used to determine the characteristics and sources of characteristics of adults who had retired in a positive way. Adults in nine settings in the United States and England were asked to name persons in their communities who had retired in a positive way and to identify characteristics that caused them to name these persons. The retirees (N=139) most often named were interviewed about their lives, and were asked what characteristics they had to a greater extent than most retirees. The most named characteristics reflecting a positive retirement were, in rank order, volunteerism, liking people, busy and active, purposeful, happy, forward looking, independent, still learning, hard working, and involved in civic activities. The most named sources of these characteristics were home and family, work, and youth and adult organizations. The data also indicated that a positive retirement developed early in life. The results suggest that a substantive "Theory of Purpose" may be the key to positive retirement. (NRB)