The interpretational problems of quantum mechanics are considered. The way in which the standard Copenhagen interpretation of quantum mechanics deals with these problems is reviewed. A new interpretation of the formalism of quantum mechanics, the transactional interpretation, is presented. The basic element of this interpretation is the transaction describing a quantum event as an exchange of advanced and retarded waves, as implied by the work of Wheeler and Feynman, Dirac, and others. The transactional interpretation is explicitly nonlocal and thereby consistent with recent tests of the Bell inequality, yet is relativistically invariant and fully causal. A detailed comparison of the transactional and Copenhagen interpretations is made in the context of well-known quantum-mechanical Gedankenexperimente and "paradoxes." The transactional interpretation permits quantum-mechanical wave functions to be interpreted as real waves physically present in space rather than as "mathematical representations of knowledge" as in the Copenhagen interpretation. The transactional interpretation is shown to provide insight into the complex character of the quantum-mechanical state vector and the mechanism associated with its "collapse." It also leads in a natural way to justification of the Heisenberg uncertainty principle and the Born probability law (P=ψψ*), basic elements of the Copenhagen interpretation.