The present study examines the association of frequency and severity of life events with memory functioning in a community sample of adults. We tested the hypothesis that stress‐related cognitive interference mediated the effects of recent life events on cognition, in addition to examining the potential roles of fatigue, sleep disturbances, and depression. The sample consisted of 310 adults (age range 19–83 years) who received a battery of cognitive tests assessing their primary memory, episodic memory, and working memory. Individuals rated how stressful previous life events were when they occurred, as well as how stressful the events were for them currently. Ratings of current but not past severity were negatively associated with working memory performance. Both stress‐related cognitive interference and depressive symptoms independently mediated this association. These findings highlight the importance of intrusive and avoidant thinking as a potential focus of psychosocial treatment for remediating stress‐related memory dysfunction. Copyright © 2014 John Wiley & Sons, Ltd.