Arousal affects our lives in a variety of ways; it can direct our attention to what is important in our environment and help us remember it more clearly. However, it remains unclear how arousal impacts short-term memory. Here we addressed this gap in our knowledge by contrasting four hypotheses: the Arousal Hypothesis, the Priority-Binding Hypothesis, the Rehearsal Hypothesis, and the Rapid-Processing Hypothesis. To distinguish between these competing accounts, we conducted two immediate serial recall experiments in which we manipulated arousal (low-arousal words vs. high-arousal words), list composition (pure vs. mixed), and presentation rate (200 ms vs. 1,000 ms). Overall, participants were better at recalling arousing information, regardless of list type or presentation rate. Our results provide clear evidence in favor of the arousal hypothesis which suggests that arousing information benefits from biologically induced enhancements at encoding. (PsycInfo Database Record (c) 2022 APA, all rights reserved).