Background: The growing use of AI-based emotion recognition in organizational and digital environments has introduced new forms of socio-technical monitoring that may influence how individuals regulate emotional expression. However, the impact of AI-enabled emotion recognition on emotional self-regulation in human–system interaction remains insufficiently understood. Purpose: This study investigates how perceived surveillance in AI-enabled emotion recognition contexts influences expressive suppression. Specifically, it examines the mediating role of emotional self-censorship and the moderating role of privacy sensitivity. Research Design: The study adopts a moderated mediation research model to analyze the relationship between perceived surveillance and expressive suppression. Emotional self-censorship is proposed as a mediator, while privacy sensitivity is examined as a moderator. The analysis employs PROCESS Macro Model 8. Study Sample: The study sample consists of 300 adults who are familiar with AI-based emotion recognition technologies. Data Collection and/or Analysis: Survey data were collected from the participants and analyzed using PROCESS Macro Model 8 to test mediation and moderation effects. Results: The results indicate that perceived surveillance increases expressive suppression through emotional self-censorship. Furthermore, this indirect effect becomes stronger among individuals with high privacy sensitivity, indicating that privacy concerns intensify behavioral responses to AI monitoring. Conclusions: The findings reveal an unintended consequence of AI-based emotion recognition technologies: they may reinforce emotional self-censorship and reduce authenticity in emotional expression. The study contributes to understanding human behavior in AI-mediated environments and provides managerial and policy implications for developing privacy-aware and human-centered AI systems that promote sustainable interaction and psychological well-being.