Chronic exposure to hypobaric hypoxia (HH) causes memory impairment and prolonged state of mental confusion. However, effect of high altitude exposure on mood state and its underlying mechanisms have been poorly studied.  Present study was undertaken to investigate the mood state alteration following chronic exposure to HH. Male Sprague Dawley rats were divided into five groups and exposed to hypoxia for 3, 7, 14 and 21 days in an animal decompression chamber at an altitude of 25,000ft. Anxiety-and depression-like behaviors were assessed by using various mazes along with changes in serotonin and glutamate level. Our study revealed a decrease in exploratory, grooming and rearing behavior in open field test following initial exposure to HH for 7 days without affecting the locomotory behavior. Initial exposure to HH-decreased time spent in open arm of elevated plus maze indicating induction of anxiety-like behavior which normalized on prolonged hypoxic exposure for 21 days. Hypoxic exposure for 7 days induced anhedonia and increased despair behavior in rat while there was steady improvement in these behaviors when exposed for 21 days. Decrease in serotonin level was noted in hippocampus along with elevated corticosterone and glutamate level which gradually decreased on prolonged exposure to HH. These findings suggest that initial exposure to HH increases transient anxiety-like behavior in rats followed by gradual improvement in mood state on prolonged exposure. Further, the study also indicates the involvement of serotonergic system in mood state alteration at high altitude following chronic exposure and reoxygenation.