Previous research revealed that memory retrieval is associated with a reactivation of sensory cortices reflecting the content of the memory. Further, such reactivation is stronger when retrieval is cued with emotional information as compared with neutral information. However, past studies focused on correct retrieval, and it remains unknown whether a similar reactivation occurs during memory errors, and whether this is enhanced in emotional contexts. Here, we hypothesized that emotion may influence memory errors due to an increase of sensory cortical reactivation at the cost of recovering episodic details (i.e. leading to incorrect retrieval of non-specific associations shared with other cues). We compared brain activations during successful memory retrieval and memory errors in 18 healthy participants who encoded unique negative or neutral scenes paired with one of four associated faces, shared with other trials. Participants were tested the next day with a scene-cued associative retrieval test, while undergoing functional magnetic resonance imaging (fMRI). Results from a face-responsive region of interest in fusiform cortex (unlike a control place-responsive region in parahippocampal cortex) showed stronger activation for both Hits ('Old' | Target) and False Alarms ('Old' | Foil), as compared with Misses ('New' | Target) and Correct Rejections ('New' | Foil). The emotional content of scene cues did not modulate activation patterns during correct retrieval but produced specific effects on Misattribution errors (incorrect 'Old' | Target, i.e., retrieval of an incorrect face cued by a previously seen scene). Specifically, Misattributions were accompanied by increased fusiform activation comparable to Hits when cued by negative scenes, but low fusiform activation similar to Misses when cued by neutral scenes. Unlike Misattributions, however, Hits cued by emotional information recruited a distinctive network previously linked to personal episodic memories, including medial prefrontal, cingulate, and hippocampal regions, together with enhanced functional coupling between the latter and fusiform cortex. No implicit effect of previous face exposure was observed in the fusiform during Misses, regardless of emotion context. Our results suggest that the reactivation of sensory areas follows subjective memory experience during retrieval, and that emotion can enhance such mechanism when the cue is recognized but detailed episodic memory mediated by fronto-hippocampal circuits is absent, leading to the retrieval of inappropriate associations and false memories.