A happy ending is an ending of the plot of a work of fiction in which there is a positive outcome for the protagonist or protagonists, and in which this is to be considered a favourable outcome.

In storylines where the protagonists are in physical danger, a happy ending mainly consists of their survival and successful completion of the quest or mission; where there is no physical danger, a happy ending may be lovers consummating their love despite various factors which might have thwarted it. A considerable number of storylines combine both situations. In Steven Spielberg's version of War of the Worlds, the happy ending consists of three distinct elements: the protagonists all survive the countless perils of their journey; humanity as a whole survives the alien invasion; and the protagonist father regains the respect of his estranged children. The plot is constructed such that all three are needed for the audience's feeling of satisfaction in the end.

A happy ending is epitomized in the standard fairy tale ending phrase, "happily ever after" or "and they lived happily ever after". Satisfactory happy endings are happy for the reader as well, in that the characters they sympathize with are rewarded. However, this can also serve as an open path for a possible sequel. For example, in the 1977 film Star Wars, Luke Skywalker defeats the Galactic Empire by destroying the Death Star; however, the story's happy ending has consequences that follow in 1980's The Empire Strikes Back that are reversed in 1983's Return of the Jedi. The concept of a permanent happy ending is specifically brought up in the Stephen King fantasy/fairy tale novel The Eyes of the Dragon which has a standard good ending for the genre, but simply states that "there were good days and bad days" afterwards.

A happy ending only requires that the main characters be all right. Millions of innocent background characters can die, but as long as the characters that the reader/viewer/audience cares about survive, it can still be a happy ending. Roger Ebert comments in his review of Roland Emmerich's The Day After Tomorrow: "Billions of people may have died, but at least the major characters have survived. Los Angeles is leveled by multiple tornadoes, New York is buried under ice and snow, the United Kingdom is flash-frozen, and much of the Northern Hemisphere is wiped out for good measure. Thank god that Jack, Sam, Laura, Jason and Dr. Lucy Hall survive, along with Dr. Hall's little cancer patient."

In Spielberg's Schindler's List, the Jewish Holocaust is a grim unchangeable background; viewers know that six million Jews would be murdered by the Nazis, and nothing can change that. Still, the specific Jews who in the film have a name and a face are saved by the courageous Schindler, and their survival in the midst of all the horrors does provide the audience with a satisfying happy ending.^{[citation needed]}

The presence of a happy ending is one of the key points that distinguish melodrama from tragedy. In certain periods, the endings of traditional tragedies such as Macbeth or Oedipus Rex, in which most of the major characters end up dead, disfigured, or discountenanced, have been actively disliked. In the seventeenth century, the Irish author Nahum Tate sought to improve William Shakespeare's King Lear in his own heavily modified version in which Lear survives and Cordelia marries Edgar. Tate's version dominated performances for a century and a half and Shakespeare's original was nearly forgotten. Both David Garrick and John Philip Kemble, while taking up some of Shakespeare's original text, kept Tate's happy ending. Edmund Kean played King Lear with its tragic ending in 1823, but he reverted to Tate's crowd-pleaser after only three performances. Only in 1838 did William Macready at Covent Garden successfully restore Shakespeare's original tragic end – Helen Faucit's final appearance as Cordelia, dead in her father's arms, became one of the most iconic of Victorian images and the play's tragic end was finally accepted by the general public. Most subsequent critics have not found Tate's amendments an improvement, and welcomed the restoration of Shakespeare's original. Happy endings have also been fastened – equally, with no lasting success – to Romeo and Juliet and Othello.

There is no universally accepted definition of a happy ending; such definitions can considerably vary with time and cultural differences. An interpretation of The Merchant of Venice's forced conversion of Shylock to Christianity is that it was intended as a happy ending. As a Christian, Shylock could no longer impose interest, undoing his schemes in the play and ending the rivalry between him and Antonio, but more important, contemporary audiences would see becoming a Christian as a means to save his soul (cf. Romans 11:15). In later times, Jews (and non-Jewish opponents of anti-Semitism) strongly objected to that ending, regarding it as depicting a victory for injustice and oppression and as pandering to the audience's prejudices.

Similarly, for sixteenth-century audiences, the ending of The Taming of the Shrew – a formerly independent and assertive woman being broken and becoming totally submissive to her husband – might have counted as a happy ending, which it would not under present-day standards of women's place in society (see The Taming of the Shrew#Sexism controversy).