Psychological well-being correlates positively with psychological need satisfaction—primarily the needs of autonomy, competence, and relatedness. The current study explores momentary happiness (defined as experienced enjoyment minus experienced stress over the course of an hour) as a function of momentary psychological need satisfaction. Results demonstrate that hour-by-hour ratings of psychological need satisfaction were correlated with momentary happiness, with individual differences in life satisfaction moderating this relationship. Ratings of autonomy and relatedness correlated positively with momentary happiness, while competence was negatively correlated with momentary happiness. Thus, engagement in competence-promoting behaviors may come at an affective cost, at least in the moment. When autonomy and relatedness needs were met, individuals with high levels of life satisfaction experienced greater increases in happiness than individuals with low levels of life satisfaction. This finding supports a sensitization model of well-being. Results are discussed with respect to their implications for self-determination theory (SDT).