The effects of transient mood states on semantic memory organization and use were investigated using event-related potentials. Participants read sentence pairs ending with (1) the most expected word, (2) an unexpected word from the expected semantic category, or (3) an unexpected word from a different (related) category; half the pairs were read under neutral mood and half under positive mood. Under neutral mood, N400 amplitudes were smallest for expected items and smaller for unexpected items when these came from the expected category. In contrast, under positive mood, N400 amplitudes to the two types of unexpected items did not differ. Positive mood seemed to specifically facilitate the processing of distantly-related, unexpected items. The results suggest that transient mood states are associated with dynamic changes in how semantic memory is used on-line.