Research suggests that mood can moderate age differences in recognizing facial emotion. In this study, we examined how an anxious versus calm mood state affected younger and older adults' processing of emotional faces. Older adults had greater difficulty identifying negative emotions, particularly when emotions were displayed at a low intensity level. However, an anxious mood did not affect age differences in emotional face recognition. In contrast, age, emotional intensity, and current mood state all affected the perceived intensity of emotion. The effects of age and mood on perceived emotional intensity were only observed for low intensity facial expressions. When induced into an anxious mood, younger adults perceived threatening emotions (i.e., fear, anger) as more emotionally intense, whereas older adults perceived anger and happiness to be more intense. These findings emphasize the need to consider both internal and external factors when investigating the effects of age on emotional face processing.