Recent evidence has suggested that not only stimulus-specific attributes or top-down expectations can modulate attention selection processes, but also the actual mood state of the participant. In this study, we tested the prediction that the induction of positive mood can dynamically influence attention allocation and, in turn, modulate early stimulus sensory processing in primary visual cortex (V1). High-density visual event-related potentials (ERPs) were recorded while participants performed a demanding task at fixation and were presented with peripheral irrelevant visual textures, whose position was systematically varied in the upper visual field (close, medium, or far relative to fixation). Either a neutral or a positive mood was reliably induced and maintained throughout the experimental session. The ERP results showed that the earliest retinotopic component following stimulus onset (C1) strongly varied in topography as a function of the position of the peripheral distractor, in agreement with a near-far spatial gradient. However, this effect was altered for participants in a positive relative to a neutral mood. On the contrary, positive mood did not modulate attention allocation for the central (task-relevant) stimuli, as reflected by the P300 component. We ran a control behavioral experiment confirming that positive emotion selectively impaired attention allocation to the peripheral distractors. These results suggest a mood-dependent tuning of position-specific encoding in V1 rapidly following stimulus onset. We discuss these results against the dominant broaden-and-build theory.