This study examines how water-related emotions explain differences in mental health outcomes associated with household water insecurity, based on randomized sampling of 685 households in 2024 in a severely water-stressed region of Iran. This extends current water insecurity research by empirically testing both negative and positive emotional mediators of mental health outcomes. In response to recent calls for better means to capture water-related emotional valences we first develop and validate a novel adaptation of the PANAS scale. Using structural equation modeling, we then are able to confirm that negative water-related emotions (such as anger and shame) mediate the relationship between household water insecurity and mental health, with stronger negative emotional responses linked to heightened depression/anxiety. However, positive water-related emotions (such as gratitude and hope) also independently predict better mental health. This suggests a novel dual-pathway model. Contrary to expectations, gender does not significantly moderate these relationships, likely due to context-specific gender roles through which men and women share household water management responsibilities. Overall, our findings emphasize the need for more nuanced models that link the lived experience of water insecurity with emotion and mental health, including consideration of the potential role of positive emotions.