Some studies suggest that stress-induced effects of cortisol on memory are modulated by the valence of the stimuli to be learned and retrieved. The present study investigated the effect of acute stress-induced cortisol secretion on acquisition and retrieval of pleasant, unpleasant and neutral words. Sixty healthy men were randomly assigned to one of the three experimental groups. Participants were either exposed to a standardized laboratory stressor (the Trier Social Stress Test) before learning a wordlist, or before retrieval, or were not stressed. Free recall and recognition were tested 24 h later. Free recall was not affected by stress exposure. For recognition, there was no main effect of the stressor, but a main effect of valence and a valence by group interaction emerged: recognition for positive words was significantly impaired when subjects were stressed before retrieval. In addition, a positive correlation between the cortisol response and errors of commission was found. The results suggest that acute stress impairs memory for positive stimuli and that stress-induced cortisol secretion interferes with accuracy of memory retrieval, i.e. the ability to discriminate true memories from false ones.