Purpose: Drawing on and extending the socially embedded model of thriving, this paper aims to investigate how and when customer participation promotes hospitality frontline employees’ engagement in extra-role service behavior. Design/methodology/approach: A two-wave questionnaire survey was carried out among frontline service employees and their immediate supervisors in a four-star business hotel in Eastern China. Path analysis using Mplus 8.3 examined a multilevel moderated mediation model. Findings: Customer participation has a positive effect on frontline employees’ experience of thriving, which in turn promotes their engagement in extra-role service behavior. Nevertheless, supervisors’ negative affect weakens the positive effect of customer participation. Practical implications: Hotels could implement employee assistance programs, arrange training on emotional regulation and positive psychology and create a fun work environment to help alleviate supervisors’ experience of negative affect so as to lessen its adverse effect on frontline employees’ perception of customer participation. Originality/value: First, this work is one of the few studies exploring how customer participation affects frontline employees’ well-being (in terms of thriving) and extra-role service behavior, which advances extant value co-creation literature. Second, the moderating role of supervisors’ negative affect enriches the limited understanding of when customer participation might not bring firm benefits. Third, by uncovering customer participation as an antecedent of employee thriving, this study extends thriving research that only attends to contexts located within organizations.