Nightmares are common, occurring weekly in 4%-10% of the population, and are associated with female gender, younger age, increased stress, psychopathology, and dispositional traits. Nightmare pathogenesis remains unexplained, as do differences between nontraumatic and posttraumatic nightmares (for those with or without posttraumatic stress disorder) and relations with waking functioning. No models adequately explain nightmares nor have they been reconciled with recent developments in cognitive neuroscience, fear acquisition, and emotional memory. The authors review the recent literature and propose a conceptual framework for understanding a spectrum of dysphoric dreaming. Central to this is the notion that variations in nightmare prevalence, frequency, severity, and psychopathological comorbidity reflect the influence of both affect load, a consequence of daily variations in emotional pressure, and affect distress, a disposition to experience events with distressing, highly reactive emotions. In a cross-state, multilevel model of dream function and nightmare production, the authors integrate findings on emotional memory structures and the brain correlates of emotion.