BACKGROUND: Social interactions that lead to positive affect are fundamental to human well-being. However, individuals with dementia are challenged to achieve positive social interaction. It is unclear how social interactions influence affect in people with dementia. This study examined the association between social interactions and affect in nursing home residents with dementia. METHODS: This repeated measures study used baseline data from a clinical trial in which 126 residents from 12 nursing homes were enrolled. Participants were video recorded twice daily on five days. Ratings of social interaction and affect were taken from the videotapes using the Interacting with People subscale of the Passivity in Dementia and the Philadelphia Geriatric Center Apparent Affect Rating Scale. Linear mixed models were used for analysis. RESULTS: Social interaction was significantly related to higher interest and pleasure at within- and between-person levels. Social interaction significantly predicted anxiety and sadness at the between-person level only. Residents with higher cognitive function also displayed greater pleasure. Greater interest and anxiety was evident during the afternoon hours. CONCLUSIONS: This study supports the impact of social interactions on positive and negative affect. Findings can guide intervention development, aimed at promoting positive social interactions and improving affect for people with dementia.