Cortisol production is increased during stress, and the actions of cortisol on receptors in the brain and other body organs are involved in allostasis, the process of adaptation to stress, as well as in allostatic load, the wear and tear associated with excessive exposure to cortisol. Using data from a community-based longitudinal study of older men and women, aged 70-79 yr, we tested the hypothesis that exposure to increasing levels of cortisol is associated with declines in memory performance. Associations between 12-h urinary free cortisol excretion and performance on tests of memory (delayed verbal recall and spatial recognition), abstraction, and spatial ability were examined. Among the women, greater cortisol excretion was associated with poorer baseline memory performance, independent of socio-demographic, health status, health behavior, and psychosocial characteristics. Moreover, women who exhibited increases in cortisol excretion over a 2.5-yr follow-up period were more likely to show declines in memory performance. By contrast, women who experienced declines in cortisol exhibited improvements in memory performance. No significant associations were found among the men. The results for the women suggest that decrements in memory performance associated with increases in cortisol may not represent irreversible effects, as declines in cortisol were associated with improvements in memory.