Previous research has explored possible origins of individual differences in subjective well-being, focusing largely on stable, internal characteristics of traits as predictors of life satisfaction (Diener & Lucas, 1999). Although past work has demonstrated that life satisfaction is largely stable over the life span, other evidence has also demonstrated the lasting impact of life events. In this study, we use married couples as a test of the impact of life circumstances on life satisfaction, focusing on similarity in life satisfaction before and after divorce. If life satisfaction is impacted by shared life circumstances, married couples (who share life circumstances) should show greater similarity in life satisfaction before divorce than after. We tested this possibility using a dyadic latent-state-trait model that examined cross-spouse similarity in the stable and changing components of life satisfaction. Using a nationally representative panel study from Germany (Wagner, Frick & Schupp, 2007), we showed that similarity declined substantially following divorce. This suggests that life satisfaction is related to shared life circumstances. (PsycINFO Database Record