Emotion can exert a modulatory role on episodic memory. Several studies have shown that negative stimuli (e.g., words, pictures) are better remembered than neutral ones. Although facial expressions are powerful emotional stimuli and have been shown to influence perception and attention processes, little is known about their effect on memory. We used functional magnetic resonance imaging (fMRI) in humans to investigate the effects of expression (happy, neutral, and fearful) on prefrontal cortex (PFC) activity during the encoding of faces, using a subsequent memory effect paradigm. Our results show that activity in right PFC predicted memory for faces, regardless of expression, while a homotopic region in the left hemisphere was associated with successful encoding only for faces with an emotional expression. These findings are consistent with the proposed role of right dorsolateral PFC in successful encoding of nonverbal material, but also suggest that left DLPFC may be a site where integration of memory and emotional processes occurs. This study sheds new light on the current controversy regarding the hemispheric lateralization of PFC in memory encoding.