Depressed individuals typically show poor memory for positive events, potentiated memory for negative events, and impaired recollection. These phenomena are clinically important but poorly understood. Compelling links between stress and depression suggest promising candidate mechanisms. Stress can suppress hippocampal neurogenesis, inhibit dopamine neurons, and sensitize the amygdala. We argue that these phenomena may impair pattern separation, disrupt the encoding of positive experiences, and bias retrieval toward negative events, respectively, thus recapitulating core aspects of memory disruption in depression. Encouragingly, optogenetic reactivation of cells engaged during the encoding of positive memories rapidly reduces depressive behavior in preclinical models. Thus, many memory deficits in depression appear to be downstream consequences of chronic stress, and addressing memory disruption can have therapeutic value.