Due to the increasing importance of urban environment quality studies, the subject of the psychological quality of the city has also received more attention. Meanwhile, positive psychology, as a new branch of psychological science, provides the possibility of newer analysis according to the current conditions and problems of the cities of our country. So, the aim of the present study is to improve the quality of the physical and functional environment of Jafarieh neighborhood in Zanjan city with a positive psychology approach. The current research is classified as exploratory-analytical research. The approach of the research is mixed and in terms of the application of the results, it can be considered as applied research. Collecting the required data and information has been done through library studies and field methods. The collection and evaluation of data related to the quality of the environment was done through a researcher-made questionnaire, and 54-question Ryff questionnaire was used to evaluate the psychological well-being of the residents. The statistical sample includes 90 residential houses, which were questioned systematically by referring to the doors of the houses. Structural equation modeling and Smart PLS software have been used to analyze effect-oriented indicators. Expert observation data have also been evaluated using the qualitative analysis method. The results show that the structure of psychological well-being in Jafarieh neighborhood is explained by effect-based indicators of the quality of the physical and functional environment to the extent of 0.241. Also, expert observation indicators establish significant relationships with some subscales of the psychological well-being structure through the components of passages, land use, and scene and landscape.