Abstract: Nocturnal cortisol release in humans is synergistically regulated by circadian rhythm and sleep. Cortisol concentrations typically reach a nadir during the slow wave sleep-rich periods of early nocturnal sleep, whereas during the late night, when rapid eye movement (REM) sleep predominates, cortisol levels are enhanced. Here we review a series of our own studies examining whether and how this regulation of cortisol release affects the consolidation of memories during sleep. The studies show that increasing cortisol during early slow wave sleep-rich periods of nocturnal sleep impairs hippocampus-dependent declarative memory formation. Preventing the natural increase in cortisol during REM sleep-rich sleep in the late night appears to enhance amygdala-dependent emotional memory. The findings are consistent with the view that cortisol via activation of limbic glucocorticoid receptors generally diminishes memory consolidation.