A key component of acute stress is a surge in vigilance that enables a prioritized processing of highly salient information to promote the organism's survival. In this study, we investigated the neural effects of acute stress on emotional picture processing. ERPs were measured during a deep encoding task, in which 40 male participants categorized 50 unpleasant and 50 neutral pictures according to arousal and valence. Before picture encoding, participants were subjected either to the Socially Evaluated Cold Pressor Test (SECPT) or to a warm water control procedure. The exposure to the SECPT resulted in increased subjective and autonomic (heart rate and blood pressure) stress responses relative to the control condition. Viewing of unpleasant relative to neutral pictures evoked enhanced late positive potentials (LPPs) over centro-parietal scalp sites around 400 msec after picture onset. Prior exposure to acute stress selectively increased the LPPs for unpleasant pictures. Moreover, the LPP magnitude for unpleasant pictures following the SECPT was positively associated with incidental free recall performance 24 hr later. The present results suggest that acute stress sensitizes the brain for increased processing of cues in the environment, particularly priming the processing of unpleasant cues. This increased processing is related to later long-term memory performance.