This study investigates the daily associations between sleep disturbances and emotional well-being, focusing on exercise and social interaction as potential moderating factors. Using a longitudinal daily diary approach, we analyzed data from 455 participants (mean age = 41.98 years, 382 females) who reported daily diaries over 20 days. Multilevel modeling was employed to analyze both within- and between-person relations between sleep variables (duration, efficiency, difficulty falling asleep) and next day positive/negative affect. The analysis also explored the moderating roles of exercise and socializing, adjusting for age, sex, and COVID-related variables. Our findings indicate that at both within- and between-person levels, higher sleep efficiency predicted increased positive affect and reduced negative affect; conversely, difficulty falling asleep predicted diminished positive affect and heightened negative affect. Sleep duration had a nonlinear relationship with positive and negative affect, with both longer and shorter than usual sleep duration predicting less positive and more negative affect. Exercise and socializing showed different moderating roles in the relationship between sleep and negative affect. Exercise was found to mitigate the negative impact of poor sleep on negative affect, whereas extended socializing amplified the salutary impact of good sleep on reducing negative affect. Our findings underscore the importance of sleep health in daily emotional well-being, suggesting associations between sleep efficiency, difficulty falling asleep, and next-day affect at both within- and between-person levels. Furthermore, the distinct moderation patterns of exercise and socializing provide unique insights into the interplay of sleep, exercise, and social interaction, allowing more targeted interventions.