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The effects of depression and anxiety, as assessed by MMPI D and Pt scales, on memory performance was examined in 3999 veterans who completed the California Verbal Learning Test (CVLT). Depressive symptoms (without anxiety) had an adverse effect on immediate recall of new information and the total amount (but not rate) of acquisition; however, retrieval and retention were unaffected. On the other hand, high levels of anxiety did not have significant detrimental effects on any aspect of memory functioning assessed including immediate recall, total amount acquired, retention, and retrieval of novel information. However, when depression was compounded by anxiety, there was not only an adverse effect on immediate recall and amount (but not rate) of acquisition, but also on the retrieval of newly learned information. We conclude that the presence of comorbid anxiety may, in part, account for the variability in previous research findings regarding the effects of depression on memory functioning.