A smart sensing system, which would help in detecting human emotions based on information from physiological parameters obtained from sensors, has been designed and developed. Sensors continuously monitor the heart rate, skin conductance and skin temperature. The amplified and filtered signals from the sensors are then processed by a microcontroller and transmitted wirelessly using ZigBee technology. The received signals from the system are displayed and stored on the computer where they are analysed visually for obvious patterns. An algorithm is being developed for automatic recognition of emotions using various clustering techniques. The partial developed system has shown good results in monitoring the physiological parameters.