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The influence of social capital on happiness is attracting attention around the world. Many studies that investigated the relationship between social capital and happiness suggest that happiness correlates to a positive social environment. The aim of this study was to examine the relationship between social capital and happiness in a community with the lowest National Health Insurance expenditures in Miyazaki Prefecture (Japan). This cross‐sectional study targeted 2730 residents in the community aged 40–75 years who were covered by National Health Insurance in 2015. A self‐administered questionnaire consisting of questions focusing on demographic characteristics, happiness, and social capital was sent to the residents, and 1106 of them (40.5%) returned the questionnaires by the deadline. The analysis of responses indicated a positive relationship between social capital and happiness with regard to all three factors of social capital (trust, connections and interaction, and social participation). Evaluating the relationship between social capital and health in terms of happiness is important to creating a lively society in which citizens support one another, in addition to promoting physical and mental well‐being. [ABSTRACT FROM AUTHOR]