Questionnaire and interview assessment can provide reliable data on attitudes and self-perceptions on emotion, and experimental laboratory assessment can examine functional relations between stimuli and reactions under controlled conditions. On the other hand, ambulatory assessment is less constrained and provides naturalistic data on emotion in daily life, with the potential to (1) assure external validity of laboratory findings, (2) provide normative data on prevalence, quality and intensity of real-life emotion and associated processes, (3) characterize previously unidentified emotional phenomena, and (4) model real-life stimuli for representative laboratory research design. Technological innovations now allow for detailed ambulatory study of emotion across domains of subjective experience, overt behavior and physiology. However, methodological challenges abound that may compromise attempts to characterize biobehavioral aspects of emotion in the real world. For example, emotional effects can be masked by social engagement, mental and physical workloads, as well as by food intake and circadian and quasi-random variation in metabolic activity. The complexity of data streams and multitude of factors that influence them require a high degree of context specification for meaningful data interpretation. We consider possible solutions to typical and often overlooked issues related to ambulatory emotion research, including aspects of study design decisions, recording devices and channels, electronic diary implementation, and data analysis.