The effects of stress on learning and memory are diverse, ranging from impairment to facilitation. Many studies emphasize the major role of the hippocampus, mainly its CA1 and CA3 areas, in the process of memory formation under emotional and stressful conditions. In the current review, we summarize work which suggests that the dentate gyrus (DG) of the hippocampus is likely to play a pivotal role in defining the impact of stress on hippocampal functioning. We describethe effects of stress on long term potentiation (LTP) and local circuit activity in the DG and the role of the amygdala in mediating these effects. As one of the brain regions known to have a high rate of adult neurogenesis, the effects of stress on DG neurogenesis will also be reviewed. Finally, we discuss exposure to stress during juvenility and its influence on the adult DG. The DG is a dynamic structure which is susceptible to stress. Under stressful conditions, its response is variable and complex, much like the behavioral outcomes of such circumstances. It is likely to significantly contribute to the diverse effects of stress on memory formation.