Emotionally arousing information is remembered better than neutral information. This enhancement effect has been shown for memory for items. In contrast, studies of association-memory have found both impairments and enhancements of association-memory by arousal. We aimed to resolve these conflicting results by using a cued-recall paradigm combined with a model-based data analysis method (Madan, Glaholt, & Caplan, 2010) that simultaneously obtains separate estimates of arousal effects on memory for associations and memory for items. Participants studied sequentially presented words in pairs that were pure (NEGATIVE-NEGATIVE or NEUTRAL-NEUTRAL) or mixed (NEGATIVE-NEUTRAL or NEUTRAL-NEGATIVE). Cued recall tests had NEUTRAL or NEGATIVE probes and NEUTRAL or NEGATIVE targets. We found impaired memory for associations involving negative words despite enhanced item-memory (more retrievable targets). A category-list control condition explained away the item-memory enhancement but could not explain the impairment of association-memory due to arousal. A second experiment with identical structure but using higher arousing taboo words revealed increased cued recall of taboo than neutral words. However, this was exclusively mediated by item-memory effects with neither enhancement nor impairment of association-memory. Thus, although cued recall was lower for pure negative pairs and higher for pure taboo pairs, our modeling approach determined a different locus of action for these memory impairing or increasing effects: Although item memory was increased by arousal, association-memory was impaired by moderately arousing, negative words and unaffected by taboo words. Our results suggest that previous results reporting an enhancement of association-memory due to arousal may have instead been solely driven by enhanced item-memory. (Contains 4 tables and 6 figures.)