Alpacas' welfare needs a multidisciplinary approach, combining applied ethology, animal husbandry and veterinary science. This article reviews issues such as key sources of alpacas' stress, their responses in stressful situations from behavioral and physiological perspectives and possibilities to develop positive human-animal relationships as well as improve well-being of alpacas kept in the European conditions and used for fiber production and tourism. The review was divided into 3 main areas: (i) stress regulation and assessment in alpacas, (ii) alpacas' welfare and Five Freedoms, (iii) the importance of behavioral knowledge to improve alpacas' welfare. Besides many potential factors inducing alpacas' stress response and decreasing quality of life in these animals, there is a number of possibilities to optimize their welfare and increase behavioral comfort. Proper alpaca care should be based on knowledge about this species' behavioral repertoire and rules of animal management practice as they could help optimize their welfare level. Keeping the duration of routine husbandry procedures short, ensuring sufficient space in the area with access to species-appropriate feed and contact with conspecifics, as well as using positive training techniques can significantly benefit animals. It can improve the quality of their life.