Abstract Studies suggest that not only words per se but also surrounding contexts play significant roles in foreign language vocabulary retention. This study investigated how different conditions of lexical and contextual emotional valence differently affect foreign language vocabulary retention. The target words were either positive (LexVal+), neutral (LexVal=), or negative (LexVal−) in meaning. Each visually enhanced target word was embedded in a sentence either positive (CtxVal+), neutral (CtxVal=), or negative (CtxVal−) in meaning. Sentences with different combinations of lexical valence and contextual valence were presented in the Study Session, which were later incidentally recalled in the Test Session. It was revealed that positive and negative words were remembered more often than neutral words and that negative contexts resulted in better retention of the embedded words than neutral contexts. These findings are in accordance with the predictions of the emotionally enhanced memory, the Emotion-Involved Processing Hypothesis, and the role of affect in the Modular Cognition Framework. Further, even if the target item is not emotional, embedding it in emotional context may result in better retention, a finding with potential pedagogical implications. Interestingly, words embedded in emotionally congruent contexts were not learned better than those in incongruent contexts, a finding contrary to expectation. The result may be explainable via the Deep Epistemic Emotion Hypothesis, calling for more empirical study.