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Description: Prior affective and social knowledge about other individuals has been shown to modulate perception of their faces as well as observers’ attentional processes when utilizing gaze information. However, it remains unknown whether emotionally charged knowledge acquired though interactive social learning may also modulate face processing. Moreover, although it seems plausible that affect induced by social interactions may influence attentional control, the relationship between these factors has not yet been established. The aim of this study was to test whether affective knowledge induced through social interactions in an exchange game with positive, negative, and neutral players can influence early stages of face processing and attentional shifts in a subsequent gaze-cueing task. In the task, the locations of future targets were cued by the gaze of the game players. As indicated by self-reported ratings, the game was successful in inducing valenced affect towards positive and negative players. On the neural level, in response to a photograph of the negative player, we observed enhanced early neural activity that was expressed as larger amplitude of the P1 component. This indicates that negative affective knowledge about an individual modulates very early stages of the processing of this individual’s face. This modulation was insufficient to cause behavioral differences in the attentional task. This study contributes to the existing literature by providing further evidence for the saliency of interactive social exchange paradigms that are used to induce affective knowledge. It also extends the previous research by presenting a very early modulation of perception by socially learned affective knowledge.