This study examined the effect of mood on predictive sentence processing by older adults. A self-paced reading task was implemented among a group of younger adults and older adults to measure their performance in online sentence processing. Half of the sentences were highly predictable, whereas the other half were lowly predictable. Music was used to induce positive or negative mood. Results show that in the positive mood condition, highly predictable sentences were processed more efficiently than lowly predictable sentences in both older and younger adults, but no significant age difference was found in the effect of predictability. In the negative mood condition, younger adults processed highly predictable sentences more efficiently than lowly predictable sentences, but there was no significant difference in reading times between the different types of sentences in older adults. The findings suggest that predictive sentence processing might be inhibited by negative mood in older adults. Practical implications of the findings are discussed.