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Lexical decisions to high- and low-arousal negative words and to low-arousal neutral and positive words were examined in an event-related potentials (ERP) study. Reaction times to positive and high-arousal negative words were shorter than those to neutral (low-arousal) words, whereas those to low-arousal negative words were longer. A similar pattern was observed in an early time window of the ERP response: Both positive and high-arousal negative words elicited greater negative potentials in a time frame of 80 to 120 msec after stimulus onset. This result suggests that arousal has a differential impact on early lexical processing of positive and negative words. Source localization in the relevant time frame revealed that the arousal effect in negative words is likely to be localized in a left occipito-temporal region including the middle temporal and fusiform gyri. The ERP arousal effect appears to result from …