The amnestic effects of benzodiazepines (BZs) have attracted considerable research interest. This reflects not only the clinical implications of memory failure for people prescribed these drugs but also the potential of BZs as tools in modelling organic memory problems. As well as impairing certain aspects of human memory functions, BZs affect mood states by reducing anxiety and inducing sedation. An unresolved issue is the extent to which the amnestic effects of BZs are separable from their sedative and anxiolytic effects. The present review focuses on this issue, first presenting a conceptual framework for evaluating the interrelationship between the various effects of BZs, and then summarising recent volunteer and patient research relevant to dissociating amnestic from other effects. Clinical implications are discussed in terms of the use of BZs alone or as adjuncts to psychotherapy for anxiety disorders, and attention is drawn to the need for more ecological validity in psychopharmacological research. Theoretical implications are explored in terms of BZs as tools in studying both memory failure and the relationship between mood and cognition.