The effect of emotional arousal on memory presents a complex pattern with previous studies reporting conflicting results of both improved and reduced memory performance following arousal manipulations. In this study we further tested the effect of negative emotional arousal (NEA) on individual-item recognition and associative recognition of neutral stimuli in healthy participants, and hypothesized that NEA will particularly impair associative memory performance. The current study consists of two experiments; in both, participants studied a list of word-pairs and were then tested for items (items recognition test), and for associations (associative recognition test). In the first experiment, the arousal manipulation was induced by flashing emotionally-negative or neutral pictures between study-pairs while in the second experiment arousal was induced by presenting emotionally-negative or neutral pictures between lists. The results of the two experiments converged and supported an associative memory deficit observed under NEA conditions. We suggest that NEA is associated with an altered ability to bind one stimulus to another as a result of impaired recollection, resulting in poorer associative memory performance. The current study findings may contribute to the understanding of the mechanism underlying memory impairments reported in disorders associated with traumatic stress.