Across any group of gifted students in any school there will always be a range of academic and other achievements. It is when these achievements are compared with measures of potential and the expectations of teachers and parents that a gifted child can sometimes be declared an underachiever. The 37 gifted students taking part in this study ranged in academic achievement from high achievers to underachievers. In part one of the study a questionnaire approach was used to measure their locus of control (LOC) and learned helplessness (LH) orientations and their tendency towards resilience or vulnerability. These students were also assessed as to their choice of performance or learning goals; effort or ability attributions for success; and the fixed or flexible nature of intelligence. The results of these investigations were then compared with the expectations of their teachers and their academic performance in recent examinations. None of the factors were found to yield consistent correlation with either expectations or academic achievements. Both high achievers and underachievers were found at all measures of all variables. In part two, a phenomenographic enquiry was undertaken by interview, to investigate the students' reactions to the twin phenomena of success and failure. LOC, LH and resilience/vulnerability were controlled for in this part of the study and the sample group chosen for interview (10 students) included both high achievers and underachievers. Analysis of the interview transcripts revealed one characteristic which consistently differentiated between the underachievers and the high achievers. This was the reaction to failure. Consistently across the sample, irrespective of their LOC, LH and resilience orientations, the students achieving at the highest level were found to display an efficacious, learn-from-mistakes attitude to failure and the underachieving students displayed unhelpful reactions to failure ranging from denial to avoidance to helplessness. The terms failing well and failing badly were used to describe these two clusters of reactions. Learning to fail well, is proposed as one mechanism to help gifted underachievers improve their academic performance. This study adds to existing understandings in that its findings are contrary to much published literature and its conclusions appears to provide a new perspective on the characteristics of the gifted underachiever.