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Prefrontal cortex (PFC) activity associated with emotional evaluation and subsequent memory was investigated with event-related functional MRI (fMRI). Participants were scanned while rating the pleasantness of emotionally positive, negative, and neutral pictures, and memory for the pictures was tested after scanning. Emotional evaluation was measured by comparing activity during the picture rating task relative to baseline, and successful encoding was measured by comparing activity for subsequently remembered versus forgotten pictures (Dm effect). The effect of arousal on these measures was indicated by greater activity for both positive and negative pictures than for neutral ones, and the effect of valence was indicated by differences in activity between positive and negative pictures. The study yielded three main results. First, consistent with the valence hypothesis, specific regions in left dorsolateral PFC …