Rationale: A growing body of evidence suggests that sleep is critical for the adaptive processing and consolidation of emotional information into long-term memory. Previous research has indicated that emotional components of scenes particularly benefit from sleep in healthy groups, yet sleep-dependent emotional memory processes remain unexplored in clinical cohorts, including those with obstructive sleep apnea (OSA). This line of research is important as it will add to the understanding of how disrupted sleep in OSA contributes to both impaired cognition and emotion dysregulation. Objectives: To test the hypothesis that individuals with OSA will have impaired sleep-dependent memory consolidation, with the greatest impact being on memory for emotional content. Methods: In this study, a group of newly diagnosed patients with OSA (n = 26; 10 female; average age, 42.5 years) and a matched group of healthy control subjects (n = 24; 13 female; average age, 37 years) were enrolled in the study at Beth Israel Deaconess Medical Center. Participants encoded scenes with negative or neutral foreground objects placed on neutral backgrounds before a night of polysomnographically recorded sleep. In the morning, they completed a recognition test in which old and new scene objects and backgrounds, presented separately and one at a time, were judged as old, new, or similar compared with what had been previously viewed. Results: Patients with OSA had a deficit in recognition memory for the scenes. Overall recognition (the ability to recognize old items as either old or similar) was impaired across all scene elements, both negative and neutral objects and backgrounds, whereas specific recognition (correctly identifying old items as old) was impaired only for negative objects. Across all participants, successful overall recognition correlated positively with sleep efficiency and rapid eye movement (REM) sleep, whereas successful specific memory recognition correlated only with REM sleep. Conclusions: Our findings indicate that fragmented sleep and reduced REM sleep, both hallmarks of OSA, are associated with disruptions in general memory impairment and veridical memory for emotional content, which could alter emotional regulation and contribute to comorbid emotional distress in OSA.