Emotional fluctuations are ubiquitous in everyday life, but precisely how they sculpt the temporal organisation of memories remains unclear. Here, we designed a novel task – the Emotion Boundary Task – wherein participants viewed sequences of negative and neutral images surrounded by a colour border. We manipulated perceptual context (border colour), emotional-picture valence, as well as the direction of emotional-valence shifts (i.e., shifts from neutral-to-negative and negative-to-neutral events) to create events with a shared perceptual and/or emotional context. We measured memory (...) for temporal order and temporal distances for images processed within and across events. Negative images processed within events were remembered as closer in time compared to neutral ones. In contrast, temporal distances were remembered as longer for images spanning neutral-to-negative shifts – suggesting temporal dilation in memory with the onset of a negative event following a previously-neutral state. The extent of negative-picture induced temporal dilation in memory correlated with dispositional negativity across individuals. Lastly, temporal order memory was enhanced for recently-presented negative (versus neutral) images. These findings suggest that emotional-state dynamics matters when considering emotion-temporal memory interactions: While persistent negative events may compress subjectively remembered time, dynamic shifts from neutral-to-negative events produce temporal dilation in memory, with implications for adaptive emotional functioning. (shrink)