Emotional events are often better preserved in memory than events without an emotional component. Emotional stimuli benefit from capturing and holding the attention of a perceiver to a higher degree than more emotion-neutral stimuli. Arousal associated with experiencing emotionally valenced stimuli or situations affects every major stage in creating, maintaining and retrieving lasting memories. Presented in this thesis were models delineating the behavioral and neurological mechanisms that might explain arousal-induced effects on subsequent memory outcome. Based on a study of relevant literature, findings were presented in this thesis that highlight amygdala activation as crucial for the enhancement of memory generally associated with emotional arousal. The amygdala modulates processing in other areas of the brain involved in memory. Heightened levels of norepinephrine, stemming from sympathetic nervous system activation, underlies observable arousal-induced memory effects and seem to be a crucial component in enabling glucocorticoid augmentation of memory. Arousal seems to further amplify the biased competition between stimuli that favors the neural representation of motivationally relevant stimuli and stimuli of a sensory salient nature. The aim of this thesis was to outline the impact of emotional arousal on different stages of memory processing, including processes for memory formation, strengthening of memory traces, and eventual subsequent retrieval.