In this study, we report evidence that neural activity reflecting the encoding of emotionally neutral information in memory is reduced when neutral and emotional stimuli are intermixed during encoding. Specifically, participants studied emotional and neutral pictures organized in mixed lists (in which emotional and neutral pictures were intermixed) or in pure lists (only‐neutral or only‐emotional pictures) and performed a recall test. To estimate encoding efficiency, we used the Dm effect, measured with event‐related potentials. Recall for neutral items was lower in mixed compared to pure lists and posterior Dm activity for neutral items was reduced in mixed lists, whereas it remained robust in pure lists. These findings might be caused by an asymmetrical competition for attentional and working memory resources between emotional and neutral information, which could be a major determinant of emotional memory effects.