The beneficial role that leisure can play in the lives of older persons is increasingly recognized by gerontologists and leisure service specialists. To study the psychological benefits of 18 commonly chosen leisure activities, 1,649 older adults, aged 55-75, responded to 27 paragraphs measuring the psychological benefits of leisure activities, using the Paragraphs About Leisure-Form E (PAL-E). Results showed significant gender differences for raising plants, dancing, watching television, reading, volunteering services, and belonging to social groups. Age effects were found for playing cards, dancing, watching television, and belonging to social groups. The eight psychological benefits measured included self-expression, companionship, power, compensation, security, service, intellectual aestheticism, and solitude. Data support the conclusions that: the taxonomy of leisure activities proposed by Overs et al. (1977), in the Inventory of Avocational Activity Participation, requires revision to improve its applicability to older persons; and leisure activities may be grouped into meaningful families or clusters on the basis of their psychological benefits. A number of tables are provided to illustrate these results. (JAC)