By the year 2050 it is expected that the number of older adults living with dementia will triple. With 42% of persons with dementia living in residential care, it is vital that we better understand how to maintain high psychosocial well-being for this population, in this setting. The objective of this study was to better understand psychosocial well-being in persons with dementia. The research team observed affect in clients with dementia (n = 22), as well as staff interactions with clients in a residential memory care unit for a total of 6999 minutes. The first purpose was to examine overall proportions of client affect and staff interaction types, both for the whole sample, and in more detail (assessing inter/intraindividual differences) for the five most observed clients. The second purpose was to identify whether proportions of positive affect in clients differed based on staff interaction type. The third purpose was to examine themes emerging from a review of field notes when staff interactions and/or client affect were noted. Analyses identified that the most observed affect type was neutral affect (53.1% of all minutes observed). The most common interaction type was neutral or no interaction (81.1% of all minutes observed). Positive affect accounted for 44.5% of observations, and positive staff interactions for 18.1% of the observations. There was very little negative affect (2.4%) and negative interactions (.8%) observed. When staff had neutral/no/negative interactions, clients were positive 36% of the time, whereas when staff had positive interactions, clients were positive 81% of the time (z = 28.84, p < .001). The review of the field notes identified themes and subthemes related to behavioral problems and other client problems, and the staff either responding to or ignoring these problems. The review also identified occasions when staff engaged clients beyond what was required of them. While quantitative analyses suggested low rates of negative staff interaction, the field notes highlight that sometimes no interaction (ignoring a client) is also problematic. This study suggests that positive social interactions between staff and clients may be important in maintaining positive affect and overall wellbeing in persons with dementia.