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Teachers’ psychological capital has attracted increasing attention as a positive psychological resource that may support teachers’ professional development, work engagement, and well-being. This paper reviews the conceptualisation, theoretical foundation, dimensions, and empirical evidence of psychological capital, with particular attention to its relevance to higher education. Drawing on positive psychology and positive organisational behaviour, the paper examines the development of the psychological capital concept and its distinction from human and social capital. It discusses the four core dimensions of psychological capital: confidence (self-efficacy), hope, resilience, and optimism, explaining their theoretical significance in the context of teaching. The review also synthesises international and Chinese research on the relationships between psychological capital and work-related outcomes, including job satisfaction, organisational commitment, well-being, and teaching practices. Existing studies suggest that psychological capital is a potentially developable psychological resource associated with positive work outcomes. However, further research is needed to understand how institutional conditions and organisational culture influence teachers’ psychological capital, particularly in public universities in ethnic minority regions of China. This review provides a conceptual foundation for future empirical studies and the development of strategies to support university teachers’ psychological resources and professional well-being.
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