Recent neurological studies indicate that the role of emotion in human cognition is essential; emotions are not a luxury. Instead, emotions play a critical role in rational decision-making, in perception, in human interaction, and in human intelligence. These facts, combined with abilities computers are acquiring in expressing and recognizing affect, open new areas for research. This paper defines key issues in ``affective computing,'' computing that relates to, arises from, or deliberately influences emotions. New models are suggested for computer recognition of human emotion, and both theoretical and practical applications are described for learning, human-computer interaction, perceptual information retrieval, creative arts and entertainment, human health, and machine intelligence. Significant potential advances in emotion and cognition theory hinge on the development of affective computing, especially in the form of wearable computers. This paper establishes challenges and future directions for this emerging field.