Stress at encoding affects memory processes, typically enhancing, or preserving, memory for emotional information. These effects have interesting implications for eyewitness accounts, which in real-world contexts typically involve encoding an aversive event under stressful conditions followed by potential exposure to misinformation. The present study investigated memory for a negative event encoded under stress and subsequent misinformation endorsement. Healthy young adults participated in a between-groups design with three experimental sessions conducted 48 h apart. Session one consisted of a psychosocial stress induction (or control task) followed by incidental encoding of a negative slideshow. During session two, participants were asked questions about the slideshow, during which a random subgroup was exposed to misinformation. Memory for the slideshow was tested during the third session. Assessment of memory accuracy across stress and no-stress groups revealed that stress induced just prior to encoding led to significantly better memory for the slideshow overall. The classic misinformation effect was also observed – participants exposed to misinformation were significantly more likely to endorse false information during memory testing. In the stress group, however, memory accuracy and misinformation effects were moderated by arousal experienced during encoding of the negative event. Misinformed-stress group participants who reported that the negative slideshow elicited high arousal during encoding were less likely to endorse misinformation for the most aversive phase of the story. Furthermore, these individuals showed better memory for components of the aversive slideshow phase that had been directly misinformed. Results from the current study provide evidence that stress and high subjective arousal elicited by a negative event act concomitantly during encoding to enhance emotional memory such that the most aversive aspects of the event are well remembered and subsequently more resistant to misinformation effects.