The present study examined the effects of leaders' mood on (a) the mood of individual group members, (b) the affective tone of groups, and (c) 3 group processes: coordination, effort expenditure, and task strategy. On the basis of a mood contagion model, the authors found that when leaders were in a positive mood, in comparison to a negative mood, (a) individual group members experienced more positive and less negative mood, and (b) groups had a more positive and a less negative affective tone. The authors also found that groups with leaders in a positive mood exhibited more coordination and expended less effort than did groups with leaders in a negative mood. Applied implications of the results are discussed.