Two cognitive processes, namely memory encoding and performance monitoring, are selected to examine how emotional processes interact with cognition. The main examination tool are event-related brain potentials (ERPs). The first section presents two experiments which require subjects to recall items from lists consisting of 12 words. One word per list is made distinct either by font color or by a highly arousing background picture. Recall performance was enhanced for color but not for emotional isolates. Event-related brain potentials (ERP) showed a more positive component for recalled non-isolated words and color-isolated words, compared to the respective non-remembered words, but not for words isolated by arousing background. Highly arousing environments might force the cognitive system to interrupt rehearsal processes in working memory, which might benefit transfer into more stable memory systems. The second section consists of four experiments. Various methods are used to bring subjects into pleasant or unpleasant emotional states while they perform a task that requires continuous monitoring of the ongoing behavior. ERPs indicate that typical markers of performance monitoring, namely the Error elated egativity (ERN), are enhanced when subjects perform under negative emotional condition, whereas the ERN is decreased when subjects perform under positive emotional conditions. Results are integrated in current models of performance monitoring by extending these by an affective dimension.