An investigation was conducted to explore the relationship between acute changes in cortisol and memory and attention in the context of an acute naturalistic stressor, namely, examination stress. Sixty students (36 male, 24 female) participated in an assessment of self-reported levels of stress, salivary cortisol, short term memory, selective and divided attention and auditory verbal working memory. Assessments were conducted during a non-exam and exam period. The results revealed that the exam period was associated with an increase in perceived levels of stress, but also a significant reduction in levels of salivary cortisol, compared with the non-exam period. This reduction in cortisol was associated with enhanced short-term memory (as measured by the total number of words recalled in a free recall task), impaired attention and an impairment in the primacy effect (a hippocampal-specific index of short term memory), but no significant effects on auditory verbal working memory. It was concluded that the results support the view that cortisol can modulate cognitive processes and that the effects of corticosteroids on cognitive function are selective.