Previous studies have shown that acute psychosocial stress impairs recognition of declarative memory and that emotional material is especially sensitive to this effect. Animal studies suggest a central role of the amygdala which modulates memory processes in hippocampus, prefrontal cortex and other brain areas. We used functional magnetic resonance imaging (fMRI) to investigate neural correlates of stress-induced modulation of emotional recognition memory in humans. Twenty-seven healthy, right-handed, non-smoker male volunteers performed an emotional face recognition task. During encoding, participants were presented with 50 fearful and 50 neutral faces. One hour later, they underwent either a stress (Trier Social Stress Test) or a control procedure outside the scanner which was followed immediately by the recognition session inside the scanner, where participants had to discriminate between 100 old and 50 new faces. Stress increased salivary cortisol, blood pressure and pulse, and decreased the mood of participants but did not impact recognition memory. BOLD data during recognition revealed a stress condition by emotion interaction in the left inferior frontal gyrus and right hippocampus which was due to a stress-induced increase of neural activity to fearful and a decrease to neutral faces. Functional connectivity analyses revealed a stress-induced increase in coupling between the right amygdala and the right fusiform gyrus, when processing fearful as compared to neutral faces. Our results provide evidence that acute psychosocial stress affects medial temporal and frontal brain areas differentially for neutral and emotional items, with a stress-induced privileged processing of emotional stimuli.