Employees may react differently to the perceived availability of motivating job characteristics during work activities, depending on the degree to which such motivating job characteristics are also present at the job level and individual differences. This study expands Job Characteristics Theory (JCT) by using a multilevel approach to predict how variations in motivating job characteristics relate to employee happiness during daily work activities. Based on adaptation level theory and the affective-reactivity hypothesis, we predicted that the positive relationship between perceived motivating job characteristics and happiness during work activities is moderated by motivating job characteristics at the job level and individual differences in trait positive affect. A sample of 68 employees filled out a general survey and reported on their job characteristics and happiness during 741 work activities using a day reconstruction method across five working days. In line with adaptation level theory, multilevel results confirmed that the perceived availability of motivating job characteristics during work activities relates positively to happiness during that same work activity, but only when similar motivating job characteristics at the job level are low. In addition, trait positive affect further moderated this cross-level interaction. In line with the affective-reactivity hypothesis, the 3-way interaction effect showed that for employees who are high in positive affect, the perceived availability of motivating job characteristics related positively to happiness during specific work activities, regardless of whether similar motivating job characteristics at the job level were high or low. We discuss how these findings add important temporal dynamics to JCT.