Can affective states – emotions, moods, and sentiments – become institutionalized in an organization such that they become “objective” factors that are exterior to any one person and resistant to change? We argue that the answer is yes, through intertwined top-down and bottom-up processes that shape an organization’s (or subunit’s) affective climate and affective culture, resulting in a dynamic equilibrium. The top-down processes include leadership, attraction-selection-attrition, and socialization, coupled with the physical, task, and social context, while the bottom-up process of emergence occurs via affective events, appraisal, affective sharing, and affect schemas. We also consider how identification with the organization (or subunit) enhances the likelihood of institutionalized affect. We conclude that institutionalized affect in organizations is far from an oxymoron.