Memories about stressful experiences need to be both specific and generalizable to adequately guide future behavior. Memory strength is influenced by emotional significance, and contextualization (i.e., encoding experiences with their contextual details) enables selective context-dependent retrieval and protects against overgeneralization. The current randomized-controlled study investigated how the early and late phase of the endogenous stress response affects the contextualization of neutral and negative information. One hundred healthy male participants were randomly divided into three experimental groups that performed encoding either 1) without stress (control), 2) immediately after acute stress (early) or 3) two hours after acute stress (late). Stress was induced via the Trier Social Stress Test and salivary alpha-amylase and cortisol levels were measured throughout the experiment. In the Memory Contextualization Task, neutral and angry faces (items) were depicted against unique context pictures during encoding. During testing 24 h later, context-dependent recognition memory of the items was assessed by presenting these in either congruent or incongruent contexts (relative to encoding). Multilevel analyses revealed that neutral information was more contextualized when encoding took place two hours after psychosocial stress, than immediately after the stressor. Results suggest that the late effects in the unique, time-dependent sequence of a healthy endogenous stress response, could complement reduced contextualization immediately after stress. The contextualization of negative information was not influenced by psychosocial stress, as opposed to earlier reported effects of exogenous hydrocortisone administration. An imbalance between the early and late effects of the endogenous stress response could increase vulnerability for stress-related psychopathology.