Testosterone is a steroid hormone thought to influence both emotional and cognitive functions. It is unknown, however, if testosterone also affects the interaction between these two domains, such as the emotional arousal-induced enhancement of memory. Healthy subjects (N=234) encoded pictures taken from the International Affective Picture System (IAPS) during functional magnetic resonance imaging (fMRI) and underwent a free recall test 10 min after memory encoding. We show that higher endogenous testosterone levels at encoding were associated with higher arousal ratings of neutral pictures in men. fMRI analysis revealed that higher testosterone levels were related to increased brain activation in the amygdala during encoding of neutral pictures. Moreover, endogenous testosterone levels were positively correlated with the number of freely recalled neutral pictures. No such relations were found in women. These findings point to a male-specific role for testosterone in enhancing memory by increasing the biological salience of incoming information.