Expression of positive emotion is generally considered to be socially beneficial, while expressive suppression is generally considered to be socially detrimental. The present study proposed that social context might affect these outcomes. Participants (N = 641) watched and rated videos of people (targets) who expressed, suppressed, or were not instructed to regulate positive emotion interacting with a positive or negative off-screen partner. It was hypothesised that when expression or suppression of positive emotion allowed targets to more closely match the emotion of their partner, they would be perceived more positively. Additionally, it was hypothesised that these effects would be mediated by emotion accommodation, or the degree to which the target was perceived to be accommodating to the emotion of their partner. These hypotheses were partially supported. Targets who expressed positive emotion were perceived more positively when interacting with a positive compared to a negative partner, while targets who suppressed positive emotion were perceived more positively when interacting with a negative compared to a positive partner. Additionally, moderated mediation analyses supported emotion accommodation as a mechanism to explain these effects. The present study supports the idea that social context affects the social outcomes of expression and suppression of positive emotion. Theoretical implications of these findings are discussed.