SummaryMood state and alertness are negatively affected by sleep loss, and can be positively influenced by exercise. However, the potential mitigating effects of exercise on sleep‐loss‐induced changes in mood state and alertness have not been studied comprehensively. Twenty‐four healthy young males were matched into one of three, 5‐night sleep interventions: normal sleep (NS; total sleep time (TST) per night = 449 ± 22 min), sleep restriction (SR; TST = 230 ± 5 min), or sleep restriction and exercise (SR + EX; TST = 235 ± 5 min, plus three sessions of high‐intensity interval exercise (HIIE)). Mood state was assessed using the profile of mood states (POMS) and a daily well‐being questionnaire. Alertness was assessed using psychomotor vigilance testing (PVT). Following the intervention, POMS total mood disturbance scores significantly increased for both the SR and SR + EX groups, and were greater than the NS group (SR vs NS; 31.0 ± 10.7 A.U., [4.4–57.7 A.U.], p = 0.020; SR + EX vs NS; 38.6 ± 14.9 A.U., [11.1–66.1 A.U.], p = 0.004). The PVT reaction times increased in the SR (p = 0.049) and SR + EX groups (p = 0.033) and the daily well‐being questionnaire revealed increased levels of fatigue in both groups (SR; p = 0.041, SR + EX; p = 0.026) during the intervention. Despite previously demonstrated physiological benefits of performing three sessions of HIIE during five nights of sleep restriction, the detriments to mood, wellness, and alertness were not mitigated by exercise in this study. Whether alternatively timed exercise sessions or other exercise protocols could promote more positive outcomes on these factors during sleep restriction requires further research.