The influence of emotion on cognition plays an important role in people's everyday life as well as in psychiatric and neurological disorders. The present study used fMRI to examine the neural correlates of cognitive-emotional interactions and its inter-individual differences. Twenty-one healthy males performed a 0-back/2-back task while negative or neutral emotion was induced by negative/neutral olfactory stimulation. Subjects revealed a differential effect of emotion on cognition; in 9 subjects, negative odor had a deteriorating influence on verbal working memory ("affected group", AG) while in 12 subjects, performance was not affected in a negative way ("unaffected group", UAG). Although no brain activation differences emerged during the working memory task, the interaction of working memory and emotion yielded significant differences between the AG and the UAG. The latter showed greater activation in the fronto-parieto-cerebellar working memory (WM) network including the precuneus while the AG demonstrated stronger activation in more "emotional" areas (mainly the temporal and medial frontal cortex) as well as compensatory activations in prefrontal regions known to be essential for the cognitive down-regulation of emotions. Hence, the UAG may have been better able to counteract the detrimental influence of negative stimulation during the 2-back task and to effectively sustain or even increase activation in the task-relevant WM network. Correlation analyses for the whole group supported this interpretation; reduced working memory performance during negative stimulation was accompanied by higher activation in the inferior frontal gyrus whereas less performance impairment was related to higher activation in the precuneus. Results confirm the importance of incorporating individual differences in emotion processing and its interaction with cognitive functions in neuroimaging.