Project failure is likely to generate a negative emotional response for those involved in the project. But do all people feel the same way? And are some better able to regulate their emotions to learn from the failure experience? In this paper we develop an emotion framework of project failure that relies on self-determination to explain variance in the intensity of the negative emotions triggered by project failure and self-compassion to explain variance in learning from project failure. We discuss the implications of our model for research on entrepreneurial and innovative organizations, employees' psychological ownership, and personal engagement at work.