Are happy people more likely to be cooperative and successful negotiators? Based on the recent Affect Infusion Model (AIM; Forgas, 1995a), four studies predicted and found that both good and bad mood had a significant mood-congruent effect on people's thoughts and plans, and their expected, and actual negotiation strategies and outcomes in both interpersonal, and intergroup bargaining. In Study 1 happy persons planned, and actually used significantly more cooperative and integrative negotiating strategies than did sad individuals. Study 2 found that these mood effects on negotiation were reduced for persons who scored high on measures of macchiavellism and need for approval, and were thus most likely to adopt motivated processing strategies in thinking about the forthcoming encounter. Study 3 confirmed the effects of good and bad mood on negotiator cognition in a design that also included a neutral, control mood condition. Study 4 found that the mood of the opposition also resulted in more mood-congruent bargaining strategies and outcomes. The findings are discussed in terms of contemporary theories of affect and cognition, and the implications of these results for real-life cognitive tasks and bargaining encounters are considered.