In recent years, a growing chorus of researchers have argued that psychological theory is in a state of crisis: theories are rarely developed in a way that indicates an accumulation of knowledge and they are often absent from our research entirely. More than 40 years ago, Paul Meehl raised these very concerns. Yet, in the ensuing decades, little has improved. We aim to chart a better path forward for psychological theory by revisiting Meehl’s criticisms, his proposed solution, and the reasons his solution failed to meaningful change the status of psychological theory. We argue that Meehl identified serious shortcomings in our evaluation of psychological theories and that his proposed solution would substantially strengthen theory testing. However, we also argue that he failed to provide researchers a set of tools for theory construction. To advance psychological theory, we must equip researchers with tools to better generate, evaluate, and develop their theories. We argue that formal theories provide this much needed set of tools, equipping researchers with tools for thinking, evaluating explanation, informing theory development, strengthening measurement, and moving toward collaborative construction of psychological theories that allow us to explain, predict, and control psychological phenomena.