Older adults often report less affective reactivity to interpersonal tensions than younger individuals, but few studies have directly investigated mechanisms explaining this effect. The current study examined whether older adults' differential endorsement of goals, appraisals, and emotion regulation strategies (i.e., conflict avoidance/de-escalation, self-distraction) during a controlled negative social interaction may explain age differences in affective and cardiovascular responses to the conflict discussion. Participants (N = 159; 80 younger adults, 79 older adults) discussed hypothetical dilemmas with disagreeable confederates. Throughout the laboratory session, participants' subjective emotional experience, blood pressure, and pulse rate were assessed. Older adults generally exhibited less reactivity (negative affect reactivity, diastolic blood pressure reactivity, and pulse rate reactivity) to the task and more pronounced positive and negative affect recovery following the task than did younger adults. Older adults appraised the task as more enjoyable and the confederate as more likeable and more strongly endorsed goals to perform well on the task, which mediated age differences in negative affect reactivity, pulse rate reactivity, and positive affect recovery (i.e., increases in posttask positive affect), respectively. In addition, younger adults showed increased negative affect reactivity with greater use of self-distraction, whereas older adults did not. Together, findings suggest that older adults respond less negatively to unpleasant social interactions than younger adults, and these responses are explained in part by older adults' pursuit of different motivational goals, less threatening appraisals of the social interaction, and more effective use of self-distraction, compared with younger adults.