This research extends service theory by examining the relationship between providers and customers in an actual retail setting.  Findings indicate that employee evaluations of the service environment improve in the presence of a pleasant, congruent ambient scent; providers are also more courteous and customers more friendly.  Most importantly, provider mood states act as moderators of the relationships between the service environment and employee attitude as well as customer perceptions of employee behavior.  Implications for managers include careful consideration of whether it is desirable to introduce ambient scent, and how to reduce the impact of negative employee mood states.