There is increasing evidence that sleep plays an important role in affective processing. However, it is unclear whether dreaming—the subjective experiences we have during sleep—also serves an affect regulation function. Here, we investigated the within-person relationship between negative affect experienced in dreams and next-day waking affect level, affect reactivity, and affect regulation. For 5 days, 40 participants reported their dreams and rated their dream affect and post-sleep waking affect level upon morning awakening. Thereafter, they performed an affect reactivity and regulation task which involved viewing neutral and negative pictures with the instruction either to simply view the pictures or to down-regulate the affect evoked by these pictures. Multilevel regression analyses showed that the more negative affect people experienced in their dreams at night, the more negative affect and the less positive affect they reported the next morning. However, negative dream affect was associated neither with affect reactivity to the pictures nor with the ability to down-regulate negative affect in response to these pictures. In fact, Bayesian analyses favored the null hypotheses. These findings fail to provide support for the affect regulation function of dreaming and, instead, speak for affective continuity between dreaming and post-sleep wakefulness.