The discovery represents the first solid evidence that an animal other than humans can discriminate between emotional expressions in another species, the researchers said.
"We think the dogs in our study could have solved the task only by applying their knowledge of emotional expressions in humans to the unfamiliar pictures we presented to them," said Corsin Muller of the University of Veterinary Medicine Vienna.
Previous attempts had been made to test whether dogs could discriminate between human emotional expressions, but none of them had been completely convincing, researchers said.
In every case, the dogs were shown only the upper or the lower half of the face.
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After training on 15 picture pairs, the dogs' discriminatory abilities were tested in four types of trials, including the same half of the faces as in the training but of novel faces, the other half of the faces used in training, the other half of novel faces, and the left half of the faces used in training.
The dogs were able to select the angry or happy face more often than would be expected by random chance in every case, the study found.
"Our study demonstrates that dogs can distinguish angry and happy expressions in humans, they can tell that these two expressions have different meanings, and they can do this not only for people they know well, but even for faces they have never seen before," said Ludwig Huber, senior author and head of the group at the University of Veterinary Medicine Vienna's Messerli Research Institute.
Huber said it appears likely that the dogs associate a smiling face with a positive meaning and an angry facial expression with a negative meaning.
The study is published in the Cell Press journal Current Biology.