Background: When a person goes missing, those left behind are at heightened risk of mental health difficulties. Little research has examined variables that may play a role in the development of psychopathology among this population and in particular, variables that may be amenable to change through targeted psychological intervention. One cognitive process that commonly occurs following adverse life events and has been linked to heightened psychological symptoms is counterfactual thinking (thoughts of “what might have been”; CFT). This study investigated the role of various qualities CFT in relation to psychological symptoms and posttraumatic growth among people with a missing loved one. Method: People with a missing loved one (N = 110) completed measures of counterfactual thinking, psychological distress, prolonged grief, posttraumatic stress and posttraumatic growth. Hierarchical regression analyses were conducted. Results: Frequency of CFT was associated with all psychological symptom measures. Upward counterfactuals (imagining how things could have been better) were largely associated with heightened psychological symptoms. Downward counterfactuals (imagining how things could have been worse) were not associated with psychological distress or prolonged grief but, were positively related to posttraumatic stress reactions and to posttraumatic growth. The effect of counterfactual object of reference on psychological outcomes differed with respect to symptom presentation. Conclusions: Various types of CFT are differentially related to psychological symptoms with downward CFT facilitating posttraumatic growth in some individuals. Implications for psychological interventions are discussed.