I defend a neo-Aristotelian conception of virtue as a cognitive and emotional disposition to act in ways conducive to human well-being and argue that 1) virtue is essential to practical efficacy (the successful exercise of our fundamental human capacities), 2) efficacy is essential to happiness, hence 3) virtue is essential to happiness. More precisely, virtue is a necessary constitutive condition of an agent’s happiness. For virtue empowers us by freeing us of skewed perceptions and irrational emotions and putting us in touch with various aspects of reality. However, virtue is not sufficient for happiness–some good fortune is also required.