Animal research suggests that cortisol facilitates memory only during emotional arousal. Thus, we predicted that during mild emotion and stress elicitation, endogenous cortisol elevations would predict memory facilitation only in individuals who report high stress-related negative affect. Thirty-one men viewed neutral and emotional stimuli and then were subjected to a public speaking stress task. Area under the curve for overall cortisol output during the speech was computed. Negative affect (NA) using the PANAS state version [Watson, D., Clark, L.A., Tellegen, A., 1988. Development and validation of brief measures of positive and negative affect: the PANAS scales. J. Personality Social Psychol. 54, 1063-1070.] was measured at baseline and immediately after the speech stressor. Cortisol output during the speech and change in NA interactively predicted free recall performance assessed 2 days later. This interaction was due to the finding that higher cortisol output was related to memory facilitation only in subjects who reported high stress-related negative affect (i.e. only in those individuals whose NA increased compared to baseline). This relation was especially prominent for recall of unpleasant pictures. Subjects who reported low stress-related negative affect, no relation was found between cortisol output during the speech and memory performance. Thus, the relation between cortisol and memory appears to depend on an increase in negative affect related to stress.