Objective: This study aimed to identify contextual and clinical factors contributing to the quality of experience of people participating in psychosocial rehabilitation activities (RA) and to investigate the association of RA with optimal experience or flow, a state characterized by the perception of high challenges and high skills, deep concentration, positive affect, clear goals, control and autonomous motivation, which contributes to individuals' well-being. Method: Twenty-seven people at an Italian psychiatric rehabilitation center provided real-time information on daily activities and associated experience through experience sampling method. Multilevel models were calculated to assess the factors contributing to participants' quality of experience. Results: Analyses showed that situation-contingent factors—type of activity and relationship between perceived challenges and skills—predicted participants' quality of experience over and above the clinical factors taken into account in this study: level of global functioning (GAF), rehabilitation duration, and type of setting (residential vs. semiresidential). In addition, RA were prominently associated with optimal experience. Conclusion and Implications for Practice: Results suggest the importance for people involved in rehabilitation programs to engage in challenging tasks, favoring both the onset of positive and complex experiences and skill development. Findings further show the usefulness of real-time assessment methods in monitoring the rehabilitation process.