In social dilemmas, verbal communication of one's intentions is an important factor in increasing cooperation. In addition to verbal communication of one's intentions, also the communication of emotions of anger and happiness can influence cooperative behavior. In the present paper, we argue that facial expressions of emotion moderate verbal communication in social dilemmas. More specifically, three experiments showed that if the other person displayed happiness he or she was perceived as honest, trustworthy, and reliable, and cooperation was increased when verbal communication was cooperative rather than self-interested. However, if the other person displayed anger, verbal communication did not influence people's decision behavior. Results also showed interactive effects on people's perceptions of trustworthiness, which partially mediated decision behavior. These findings suggest that emotion displays have an important function in organizational settings because they are able to influence social interactions and cooperative behavior. Copyright © 2009 John Wiley & Sons, Ltd.