Glucocorticoid stress hormones are crucially involved in modulating mnemonic processing of emotionally arousing experiences. They enhance the consolidation of new memories, including those that extinguish older memories, but impair the retrieval of information stored in long-term memory. As strong aversive memories lie at the core of several fear-related disorders, including post-traumatic stress disorder and phobias, the memory-modulating properties of glucocorticoids have recently become of considerable translational interest. Clinical trials have provided the first evidence that glucocorticoid-based pharmacotherapies aimed at attenuating aversive memories might be helpful in the treatment of fear-related disorders. Here, we review important advances in the understanding of how glucocorticoids mediate stress effects on memory processes, and discuss the translational potential of these new conceptual insights.