A growing body of evidence suggests that sleep can help to decouple the memory of emotional experiences from their associated affective charge. This process is thought to rely on the spontaneous reactivation of emotional memories during sleep, though it is still unclear which sleep stage is optimal for such reactivation. We examined this question by explicitly manipulating memory reactivation in both rapid-eye movement sleep (REM) and slow-wave sleep (SWS) using targeted memory reactivation (TMR) and testing the impact of this manipulation on habituation of subjective arousal responses across a night. Our results show that TMR during REM, but not SWS significantly decreased subjective arousal, and this effect is driven by the more negative stimuli. These results support one aspect of the sleep to forget, sleep to remember (SFSR) hypothesis which proposes that emotional memory reactivation during REM sleep underlies sleep-dependent habituation.