Despite their unprecedented popularity, the psychological mechanisms through which gratitude journals operate are poorly understood. Also the use of gratitude journaling to enhance social relationships has been neglected in past research, despite the importance of healthy relationships for people’s happiness. This randomized controlled study examined the effect of (a) a traditional gratitude journal (fostering gratitude for daily life), and (b) an interpersonal gratitude journal (fostering gratitude for one’s existing social relationships), versus (c) an active control journal, on life satisfaction. Ninety-one participants were randomized to one of three conditions with 2-week and 1-month follow-ups. The traditional gratitude intervention (vs. control) showed improvements in friendship at immediate post-test and 1-month follow-up, and these effects were accounted for by changes in gratitude over time. Additionally, the traditional gratitude intervention (vs. control) predicted enhanced life satisfaction at follow-up, and this was serially mediated by 6 week changes in gratitude and perceived friendship quality. No such differences over time were observed between the interpersonal gratitude intervention and either the control intervention or the traditional gratitude intervention. Actively appreciating things in daily life appears to be effective in enhancing the quality of people’s social relationships, and producing sustained improvements in subjective wellbeing.