A growing body of work has provided evidence for the intimate and bidirectional nature of the relation between sleep and emotion. Here, we review the influence of sleep on emotions, where poor sleep can lead to an increased emotional reactivity to stressors. In turn, emotions and changes in mood can influence sleep quality and architecture. Furthermore, sleep has been related to the enhancement of several cognitive functions, such as emotional memory processing. Especially during rapid eye movement (REM) sleep, emotional memories are strengthened not only through increased (re)activations of several emotion-related brain areas but also by influxes of steroid hormones. In major depressive disorder (MDD), both emotional memory processing and sleep are disrupted. In the final part of the chapter, we integrate all findings and propose a new framework on how schema-related memory processing and sleep could mediate emotional memory biases in MDD.