Recent neuroimaging results suggest that distinct regions within the medial temporal lobe (MTL) may differentially support the episodic encoding of item and relational information for nonemotional stimuli . The present study was designed to assess whether these findings generalize to emotional stimuli. Behaviorally, we found that emotion reduced item recognition accuracy but did not reliably affect relational memory. fMRI analyses revealed that neutral and emotional words elicited distinct activation patterns within MTL regions predictive of subsequent memory. Consistent with previous findings for neutral words, hippocampal activation predicted later relational memory, whereas activation in the perirhinal cortex predicted successful item recognition. However, for emotional words, activation in the amygdala, hippocampus, and posterior parahippocampal cortex predicted item recognition only. These data suggest that MTL regions differentially support encoding of neutral and emotional stimuli.