Several theorists have argued in favor of a distinction between overt and covert narcissism, and factor analytic studies have supported this distinction. In this paper I demonstrate that overt narcissists report higher self-esteem and higher satisfaction with life, whereas covert narcissists report lower self-esteem and lower satisfaction with life. I also present mediational models to explain why overt narcissists are relatively happy and covert narcissists are relatively unhappy. In analyses using both partial correlations and structural equation modeling, self-esteem consistently mediated the associations between both types of narcissism and happiness, whereas self-deception did not. These results further demonstrate some of the self-centered benefits associated with overt narcissism and some of the strong psychological costs associated with covert narcissism. (C) 2002 Elsevier Science Ltd. All rights reserved.