The goal of this study was to investigate the linkages of positive affect (PA) with cognitive health and its decline among elder Mexican Americans. We conducted secondary analysis of longitudinal data from the Sacramento Area Latino Study on Aging (SALSA). We used the structural equation modeling framework to achieve three specific aims: (1) identify a valid measure of PA, (2) describe within-person trajectories of PA and cognitive health, and (3) test the inter-relations of these two processes over time. Results showed that, on average, PA and cognitive ability (including verbal memory) decreased over time. Yet, there was significant variability in these patterns of change. Bivariate latent growth curve models showed significant correlations of baseline levels and rates of change of PA and cognitive ability even after controlling for age, education, sex, bilingualism, and depression. Results support the hypothesis that increases and decreases in PA tend to be related to increases and decreases in cognitive health at old age among Mexican Americans.