Abstract Our emotions may influence how we interact with others. Previous studies have shown an important role of emotion induction in generating empathic reactions towards others’ affect. However, it remains unclear whether (and to which extent) our own emotions can influence the ability to infer people’s mental states, a process associated with Theory of Mind (ToM) and implicated in the representation of both cognitive (e.g. beliefs and intentions) and affective conditions. We engaged 59 participants in two emotion-induction experiments where they saw joyful, neutral and fearful clips. Subsequently, they were asked to infer other individuals’ joy, fear (affective ToM) or beliefs (cognitive ToM) from verbal scenarios. Using functional magnetic resonance imaging, we found that brain activity in the superior temporal gyrus, precuneus and sensorimotor cortices were modulated by the preceding emotional induction, with lower response when the to-be-inferred emotion was incongruent with the one induced in the observer (affective ToM). Instead, we found no effect of emotion induction on the appraisal of people’s beliefs (cognitive ToM). These findings are consistent with embodied accounts of affective ToM, whereby our own emotions alter the engagement of key brain regions for social cognition, depending on the compatibility between one’s own and others’ affect.