© 2017, The Author(s). Research into the relation between religion and happiness offers inconclusive evidence. Religion seems to matter but it is not entirely clear how and why. Moreover much of the research to date is rooted in western experiences. This article analyzes primary data from Bangladesh to examine how religion figures in people’s wellbeing and life chances. It identifies differences in reported happiness between the country’s two largest religious populations: Muslims and Hindus. Our main argument is that the significance of religion is only really understood when considered alongside social, economic and political processes. The data and analysis make an important contribution to the limited knowledge we have of the relation between religion, political connectedness and happiness in non-western societies. It also highlights the need to incorporate more contextualizing analyses into our assessments of the relation between religion and happiness.