AbstractDespite a voluminous literature on happiness and well‐being, debates have been stunted by persistent dissensus on what exactly the subject matter is. Commentators frequently appeal to intuitions about the nature of happiness or well‐being, raising the question of how representative those intuitions are. In a series of studies, we examined lay intuitions involving happiness‐ and well‐being‐related terms to assess their sensitivity to internal (psychological) versus external conditions. We found that all terms, including ‘happy’, ‘doing well’ and ‘good life’, were far more sensitive to internal than external conditions, suggesting that for laypersons, mental states are the most important part of happiness and well‐being. But several terms, including ‘doing well’, ‘good life’ and ‘enviable life’ were substantially more sensitive to external conditions than others, such as ‘happy’, consistent with dominant philosophical views of well‐being. Interestingly, the expression ‘happy’ was completely insensitive to external conditions for about two thirds of our participants, suggesting a purely psychological concept among most individuals. Overall, our findings suggest that lay thinking in this domain divides between two concepts, or families thereof: a purely psychological notion of being happy, and one or more concepts equivalent to, or encompassing, the philosophical concept of well‐being. In addition, being happy is dominantly regarded as just one element of well‐being. These findings have considerable import for philosophical debates, empirical research and public policy.