The psychology of space and color is a fundamental aspect of interior design that significantly influences human emotions, behavior, comfort, and overall well-being within built environments. Interior spaces are not merely physical settings; they function as psychological environments that directly affect mood, cognitive performance, productivity, and social interaction. Color, as a powerful visual element, has the ability to evoke emotional responses such as calmness, excitement, stress, or comfort, while spatial design determines movement patterns, privacy levels, and perceptions of openness or confinement. This study examines the psychological relationship between spatial organization and color application in interior environments and evaluates how these elements collectively impact users. Through an analytical review of existing Indian and international literature, the research identifies the role of space and color in creating functional, emotionally supportive, and user centered interior environments.