This paper is an attempt to take a step closer to understanding the institutions–happiness relationship. We provide one of the first studies on how institutions affect general life satisfaction across the wide set of Russian regions. Using individual panel data, as well as the range of estimates of institutions’ quality in 32 regions of Russia, we empirically investigate its relationship to the level of happiness measured by the subjective well-being 5-step numeral score. We discovered that investment attractiveness, infrastructure, and availability of human resources in the region affects positively on the average level of life satisfaction, while the crime level (protecion) has the opposite effect. We also found the questions for further research regarding the effect of corruption level and the informal employment.