Acute stress disorder is characterized by dissociative responses that are theorized to result in deficient encoding and retrieval of trauma-related material. This study examined retrieval inhibition using the list method of the directed forgetting paradigm in traumatized individuals with acute stress disorder (ASD; n = 14), no ASD (n = 14), and a nontraumatized control group (n = 15). Participants were presented with a list of intermixed positive, neutral, and trauma-related words. Instructions to forget that list and instead remember a second list were then given, and a new list presented. ASD participants exhibited poorer recall of to-be-forgotten trauma words than the non-ASD and control groups. The ASD group also demonstrated deficient recognition of to-be-remembered and to-be-forgotten positive words. Severity of acute posttraumatic stress response was associated with retrieval impairments. The cumulative findings suggest that ASD is associated with impoverished memory for trauma-related and positive material.