Definition of unwind transitive verb 1a : to cause to uncoil : wind off : UNROLL b : to free from or as if from a binding or wrapping c : to release from tension : RELAX 2 archaic : to trace to the end unwinding the labryinth and bringing the hero out — Laurence Sterne 3 : to undo (a financial arrangement or position) through the necessary legal or financial steps unwound most of its natural gas hedges — The New York Times intransitive verb 1 : to become uncoiled or disentangled : UNFOLD 2 : to become released from tension