The current study aimed to examine: a) the relationship between dispositional forgiveness and a variety of mental health outcomes, and b) the effectiveness of a new group psychoeducational intervention in Greek-Cypriot University students. The intervention was designed with the triple aim of: a) increasing interpersonal forgiveness for a perpetrator of a particular offense that was committed against the individual, b) increasing self-forgiveness for a specific transgression committed by the individual against another person and c) increasing dispositional (trait) forgiveness. In the first phase of the study, 288 university students were asked to complete questionnaires measuring dispositional forgiveness, affect balance, depression and quality of life. In the second phase of the study, 21 psychology postgraduate students who indicated they have experienced two unresolved interpersonal transgressions - one of which committed against them and the other committed by them - were enrolled in a psychoeducational intervention group and tested against a control group (n = 21). Measures of state and dispositional forgiveness, affect balance and depression were obtained at pretest, posttest, and at a 4-week follow-up. Study 1 results indicate that dispositional forgiveness is a significant predictor of affect balance, depression and quality of life, and that the self-forgiveness component of dispositional forgiveness is a more robust predictor than the other-forgiveness component in predicting variance in all outcome measures. Study 2 results indicate that, compared to the control group, participation in the psychoeducational group was shown to be effective for multiple outcome measures, including increasing self-forgiveness, other-forgiveness, dispositional forgiveness, and affect balance; we did not find evidence for effects on depressive symptomatology. The implications of these findings for forgiveness research and intervention are discussed.