In this article we develop the Wheel Model of humor, which addresses the theme of this special issue by casting humor events as an important driver of employee happiness and well-being through their influence on positive affect. Drawing on theories of humor and emotion, the Wheel Model suggests that humor-induced positive affect results in transmission of emotion to social groups, which in turn creates a climate that supports humor use and subsequent humor events. This model is depicted in a circular pattern to highlight the cumulative and escalatory process through which individual humor events can impact individuals and groups over repeated cycles of the wheel. We also describe individual and environmental variables that are likely to have an impact on relationships within the Wheel Model. Finally, we discuss specific research contexts to which the Wheel Model can be applied (mentoring, leadership, groups/teams), as well as other future research directions.