Problems with sleep, emotion regulation, and externalizing psychopathology are interrelated, but little is known about their day-to-day associations in youth. We examined self-reported daily sleep quality as a bidirectional predictor of next-day positive and negative affect (PA/NA), with externalizing symptoms as a moderator. Data were drawn from an ecological momentary assessment (EMA) study involving 82 youths (ages 9–13; 50% female; 44% White, 37% Black/African American) at high (n = 41) or low (n = 41) familial risk for psychopathology. Parents rated youths’ externalizing symptoms at baseline. Youths then completed a 9-day EMA protocol, reporting sleep quality 1x/day and affect 4-8x/day. Daily means, peaks, and variability in PA and NA were computed. Multilevel models examined bidirectional associations between sleep and affect (between- and within-person), testing externalizing symptoms as a moderator and controlling for age and sex. In models of sleep predicting affect: Within-person, poorer-than-usual sleep quality predicted greater variability and higher peaks in next-day NA, but only for youth with higher levels of externalizing symptoms. Between-person, poor sleep quality and higher levels of externalizing symptoms predicted lower mean and peak PA. In models of affect predicting sleep: Within-person, lower-than-usual mean PA predicted poorer subsequent sleep quality, but only for youth with higher levels of externalizing symptoms. Between-person, youths with higher mean and peak PA had better sleep quality. These findings suggest that affective functioning is bidirectionally linked to daily self-reported sleep quality among high- and low-risk youth. Specific disturbances in daily sleep-affect cycles may be distinctly associated with externalizing psychopathology.