When tested in the Deese-Roediger-McDermott paradigm, children typically exhibit fewer false memories than do adolescents or adults. Here, participants' moods and the valence of word lists were manipulated to explore the mechanism responsible for this developmental reversal in memory performance. Children (7- to 8-year-olds), adolescents (11- to 12-year-olds), and young adults (18- to 22-year-olds; N = 270) were assigned to one of three induced mood conditions and were presented with emotional word lists. In negative moods, adolescents and adults falsely recalled more negative information than did children, showing the typical developmental reversal effect. This effect, however, was eliminated when participants were in positive moods. The findings provide support for associative-activation theory and have important implications for our understanding of the development of emotional false memories.