In this research, an emotion recognition system is developed based on valence/arousal model using electroencephalography (EEG) signals. EEG signals are decomposed into the gamma, beta, alpha and theta frequency bands using discrete wavelet transform (DWT), and spectral features are extracted from each frequency band. Principle component analysis (PCA) is applied to the extracted features by preserving the same dimensionality, as a transform, to make the features mutually uncorrelated. Support vector machine (SVM), K-nearest neighbor (KNN) and artificial neural network (ANN) are used to classify emotional states. The cross-validated SVM with radial basis function (RBF) kernel using extracted features of 10 EEG channels, performs with 91.3% accuracy for arousal and 91.1% accuracy for valence, both in the beta frequency band. Our approach shows better performance compared to existing algorithms applied to the "DEAP" dataset.