Blind people must rely more than sighted people on auditory input in order to acquire information about the world. The present study was designed to test the hypothesis that blind people have better memory than sighted individuals for auditory verbal material and specifically to determine whether memory encoding and/or retrieval are improved in blind adults. An incidental memory paradigm was employed in which 11 congenitally blind people and 11 matched sighted controls first listened to 80 sentences which ended either with a semantically appropriate or inappropriate word. Immediately following, the recognition phase occurred, in which all sentence terminal words were presented again randomly intermixed with the same number of new words. Participants indicated whether or not they had heard the word in the initial study phase. Event-related brain potentials (ERPs) were recorded from 28 electrode positions during both the encoding and the retrieval phase. Blind participants' memory performance was superior to that of sighted controls. In addition, during the recognition phase, previously presented words elicited ERPs with larger positive amplitudes than new words, particularly over the right hemisphere. During the study phase, words that would subsequently be recognized elicited a more pronounced late positive potential than words that were not subsequently recognized. These effects were reliable in the congenitally blind participants but could only be obtained in the subgroup of sighted participants who had the highest memory performance. These results imply that blind people encode auditory verbal material more efficiently than matched sighted controls and that this in turn allows them to recognize these items with a higher probability.