Previous research has documented that mood affects memory accuracy. The present study aimsto (1) replicate earlier work showing that mood (negative, positive, neutral) and valence affectsmemory consolidation, (2) examine whether retrieval processes are more likely to preserve falsememories when a mood is induced, (3) identify error prevalence associated with memoryconsolidation. A recognition-memory standard for photographs depicting script-like events wasused. Individuals in both negative and positive moods–similar in arousal levels–correctlyidentified more target events and are more confident in fewer false memories comparing toindividuals in a neutral mood. This shows that arousal (but not valence) helps predict memoryperformance. These findings suggest that arousal state affects memory while mood mediates trueand false memory.