The formation of associations between items and their context has been proposed to rely on mechanisms distinct from those supporting memory for a single item. Although emotional experiences can profoundly affect memory, our understanding of how it interacts with different aspects of memory remains unclear. We performed three experiments to examine the effects of emotion on memory for items and their associations. By presenting neutral and negative items with background contexts, Experiment 1 demonstrated that item memory was facilitated by emotional affect, whereas memory for an associated context was reduced. In Experiment 2, arousal was manipulated independently of the memoranda, by a threat of shock, whereby encoding trials occurred under conditions of threat or safety. Memory for context was equally impaired by the presence of negative affect, whether induced by threat of shock or a negative item, relative to retrieval of the context of a neutral item in safety. In Experiment 3, participants were presented with neutral and negative items as paired associates, including all combinations of neutral and negative items. The results showed both above effects: compared to a neutral item, memory for the associate of a negative item (a second item here, context in Experiments 1 and 2) is impaired, whereas retrieval of the item itself is enhanced. Our findings suggest that negative affect impairs associative memory while recognition of a negative item is enhanced. They support dual-processing models in which negative affect or stress impairs hippocampal-dependent associative memory while the storage of negative sensory/perceptual representations is spared or even strengthened.