While first studies suggested that emotional task material may enhance prospective memory performance in young and older adults, the extent and mechanisms of this effect are under debate. The authors explored possible differential effects of cue valence on the prospective and retrospective component of prospective memory in young and older adults. Forty-five young and 41 older adults performed a prospective memory task in which emotional valence of the prospective memory cue was manipulated (positive, negative, neutral). The multinomial model of event-based prospective memory was used to analyze effects of valence and age on the two prospective memory components separately. Results revealed an interaction indicating that age differences were smaller in both emotional valence conditions. For older adults positive cues improved the prospective component, while negative cues improved the retrospective component. No main effect of valence was found for younger adults on an overt accuracy measure, but model-based analyses showed that the retrospective component was enhanced in the positive compared with the negative cue condition. The study extends the literature in demonstrating that processes underlying emotional effects on prospective memory may differ depending on valence and age.