The authors examined the effect of a positive emotional state on interpretation bias for threat in children with anxiety disorders. Participants were 34 children with anxiety disorders and 34 children without any psychological disorders who were randomly assigned to either a positive or neutral emotion induction condition. Consistent with the broaden-and-build theory, children with anxiety disorders exhibited an interpretation bias for threat, but not when they were in a positive emotional state. Furthermore, results indicated that positive emotional state made a unique prediction of interpretation bias score, whereas state anxiety did not. Findings are discussed with reference to theory, clinical implications, and suggestions for future research.