The present study investigated whether emotional states influence the neural processing of language. Event-related potentials recorded the brain's response to positively and negatively valenced words (e.g., love vs. death) while participants were directly induced into positive and negative moods. ERP electrodes in frontal scalp regions of the brain distinguished positive and negative words around 400 ms poststimulus. The amplitude of this negative waveform showed a larger negativity for positive words compared to negative words in the frontal electrode region when participants were in a positive, but not negative, mood. These findings build on previous research by demonstrating that people process affective language differently when in positive and negative moods, and lend support to recent views that emotion and cognition interact during language comprehension.