Little attention has been paid to the relation between daily affect and sleep, as most prior studies have focused instead on the role of pathological mood in the context of sleep disturbance. However, understanding the transaction between normal variations in emotional experiences and sleep can shed light on the premorbid vulnerabilities that trigger the evolution of affect and sleep into more problematic states. The present study used a 2‐week daily sampling approach to examine the impact of day‐to‐day variations in positive and negative affect on nightly self‐reported sleep‐onset latency, sleep duration and sleep quality in a sample of young women. Hierarchical linear modelling revealed temporal relations between positive and negative affect states and sleep parameters. Specifically, different aspects of both positive and negative affect were uniquely predictive of sleep indices, with sadness and serenity acting as the most consistent predictors. Additionally, better sleep quality was predictive of greater happiness the following day. These results highlight the importance of how our daily emotional experiences influence our nightly sleep and, in turn, how our sleep has an impact on our daily affect. Moreover, our findings may offer insight into the progression of normative levels of affect and sleep as they develop into comorbid depression, anxiety and insomnia.