One must process others’ facial affect proficiently to facilitate social functioning, and both social functioning and processing of facial affect can be impaired in sleep-deficient states. Based on mood-salience, decreased positive affect and increased negative affect experienced from sleep deficits or from depression might differentially modulate attentional responses to others’ positive and negative facial expressions. The present study examined this possibility by assessing college students’ subjective sleep–wake experience and their P3 event-related potentials responses, which indicate attention allocation. Fifty-five participants completed the Pittsburgh Sleep Quality Index (PSQI), assessments of current and past depressive symptoms, and a modified oddball task including affective facial expression stimuli. Factor analysis was conducted on PSQI data, and structural equation models were estimated to examine associations between PSQI latent factors and oddball P3 amplitude, controlling for current and past depressive symptomatology. Results indicated that one of the two identified PSQI factors (dysfunctional sleep insufficiency) was negatively associated with P3 amplitude in response to happy facial stimuli, while PSQI factor associations with sad and neutral stimuli were non-significant. Findings suggest that particular self-reported sleep–wake problems (dynamic interplay of sleep duration, sleep quality, and psychosocial functioning) can be related to decreased elaborated attention towards others’ positive facial expressions, potentially a marker of decreased inclination towards social rewards. This pattern may be particularly relevant in college, a context that can present important social opportunities and reinforce problematic sleep habits. Future longitudinal research that includes assessments of social functioning and diverse samples would be beneficial.