Due to the expansion of alternative selling channels, such as television and the Internet, an attractive store image and positive emotional experience in on-site stores have been becoming more critical to their success as retail environments. This concern is shared among designers and marketers. Several studies show that the emotional shopping experience influences consumers' purchasing behaviors. However, there is a lack of research on the interaction between the in-store environment and human emotion. The purpose of this thesis is to propose a framework that can explain the relationship between store environments and consumers' emotional responses. It can be used as a guideline for store designers and marketers in the creation of an effective store design. This framework is developed from the Mehrabian-Russell model, Berlyne's aesthetic theory, and the Kaplan and Kaplan preference theory. Using a grounded theory approach, a critical analysis of existing theories resulted in the integration of new interpretations. "Pleasure" and "arousal" are conceptualized as emotional dimensions and the interaction is identified as an inverted-U shape of function of arousal under the condition of pleasure. Environmental stimuli are presented in relation to the emotional dimensions, while six arousal control devices are introduced for controlling the environmental stimuli. The proposed framework is applied as a case study in an actual design process for the Octagon Shop, located in downtown Ames, Iowa. The design analysis and development are conducted and followed by the proposed framework. The design results reveal the potential use for the framework, not only for in-store retail environments, but also in broader design applications. Studies of more detailed environment-human emotional interaction, relationship to creativity, and investigation on detailed arousal quality are suggested for further research.