Numerous studies have investigated how stress impacts veridical memory, but how stress influences false memory formation remains poorly understood. In order to target memory consolidation specifically, a psychosocial stress (TSST) or control manipulation was administered following encoding of 15 neutral, semantically related word lists (DRM false memory task) and memory was tested 24 h later. Stress decreased recognition of studied words, while increasing false recognition of semantically related lure words. Moreover, while control subjects remembered true and false words equivalently, stressed subjects remembered more false than true words. These results suggest that stress supports gist memory formation in the DRM task, perhaps by hindering detail-specific processing in the hippocampus.