In this chapter, we identify and discuss the implications of affect in "vertical" supervisor-subordinate exchange relationships and "lateral" team-member exchange relationships in teams. We begin this chapter by outlining the background of this research. We then provide an overview of literature regarding leader-member exchange (LMX), affective states, and team-member exchange (TMX) that are important variables to be incorporated in this research. Following this, we focus on presenting the existing body of relevant research and theories associated with the variables. We also propose a model for future research effort, outlining the role of affect plays in facilitating vertical and lateral exchange relationships among supervisors, subordinates and coworkers in teams. Finally, we discuss implications for theory and practice, and identify future research directions.