The 21st century is an unprecedented crisis ridden century that has consistently challenged applied psychologists to optimize their knowledge and applications in the search for solutions. Applied Psychology as an indispensable tool represents evidence based practical application of psychological principles and research methodologies to solving real world problems in education, governance, mental health, peace building, economy, environment, healthcare, industry, business etc. The resilience and contributions of Psychology to overall human development in the 21st century cannot be overemphasized. Applied Psychology is of incredible value to humans and society at large and continues to be a problem-solving discipline across borders, sectors, jurisdictions, cultures and civilizations. The objective of this paper is to examine the relevance of psychology and create a better understanding of the increasing impact of applied psychology and the contributions of the discipline to societal development. The paper will identify challenges and gaps that needed to be filled from context of preferring practical solutions to collective wellbeing, conflicts, unproductive human behavior and actions. The paper underscores the importance of behavioral change and will analyze how applied psychology impacts policy formulation and societal transformation. The paper reviewed relevant literature on psychological applications in different fields of practice which revealed that applied psychology has benefitted society and has made an unprecedented positive impact on human lives, policy and societal transformation and has considerably enhanced human sustainability. Recommendations were made for the advancement of practice and impact in various fields of applied psychology.