Mood, as a long-term affective state, is thought to modulate short-term emotional reactions in animals, but the details of this interplay have hardly been investigated experimentally. Apart from a basic interest in this affective system, mood is likely to have an important impact on animal welfare, as bad mood may taint all emotional experience. In the present study about mood – emotion interaction, 29 sheep were kept under predictable, stimulus-rich or unpredictable, stimulus-poor housing conditions, to induce different mood states. In an experiment, the animals were confronted with video sequences of social interactions of conspecifics showing agonistic interactions, ruminating or tolerantly co-feeding as stimuli of different valences. Emotional reactions were assessed by measuring frontal brain activity using functional near-infrared spectroscopy and by recording behavioral reactions. Attentiveness of the sheep decreased from videos showing agonistic interactions to ruminating sheep to those displaying co-feeding sheep. Seeing agonistic interactions was also associated with a deactivation of the frontal cortex, specifically in animals living under predictable, stimulus-rich housing conditions. These sheep generally showed less attentiveness and locomotor activity and they had their ears in a forward position less often and in a backward position more often than the sheep from the unpredictable, stimulus-poor conditions. Housing conditions influenced how the sheep behaved, which can either be thought to be mediated by mood or by the animals’ previous experience with stimulus-richness in their housing conditions. Frontal cortical activity may not depend on valence only, but also on the perceptual channel through which the stimuli were perceived.