Happiness and joy are among the fundamental natural needs of human beings. They play a significant role in individuals’ spiritual and physical development and influence various dimensions of their personal and social lives. This study seeks to answer the following question: From the perspectives of the Holy Qur’an, Hadith, and psychology, what impact does happiness have on human development? A descriptive-analytical investigation of this issue demonstrates that the Holy Qur’an, Hadith, and psychological science classify happiness into praiseworthy and blameworthy forms and regard it, as influenced by various factors, as playing a vital role in both the individual and social growth and advancement of human beings. The Holy Qur’an and Hadith trace individual and social happiness to belief in divine unity (tawḥīd) and the God-given nature (fiṭrah) of human beings. By warning against isolation and depression, they assist individuals in progressing along the path of divine pleasure while providing the conditions necessary for spiritual renewal and facilitating their journey toward perfection. Psychology, while likewise recognizing happiness as an important factor in maintaining both mental and physical health, views individual happiness as the outcome of the integration of the individual’s psychological structure, emotional harmony, intellectual flourishing, cognitive enhancement, and the development of creative thinking. Despite psychological and social pressures, it considers happiness a major factor in disease prevention and a foundation for personal growth and success in life. Furthermore, psychology regards social happiness as being shaped by a combination of cultural, social, and psychological factors and as an important contributor to improving the quality of collective life.