This article continues our project to apply groundbreaking new literature on the behavioral psychology of human happiness to some of the most deeply analyzed questions in law. Here we explain that the new psychological understandings of happiness interact in startling ways with the leading theories of criminal punishment. Punishment theorists, both retributivist and utilitarian, have failed to account for human beings' ability to adapt to changed circumstances, including fines and (surprisingly) imprisonment. At the same time, these theorists have largely ignored the severe hedonic losses brought about by the post-prison social and economic deprivations (unemployment, divorce, and disease) caused by even short periods of incarceration. These twin phenomena significantly disrupt efforts to attain proportionality between crime and punishment and to achieve effective marginal deterrence. Hedonic psychology thus threatens to upend conventional conceptions of punishment and requires retributivists and utilitarians to find novel methods of calibrating traditional punitive sanctions if they are to maintain the foundations upon which punishment theory rests.