Study Objectives: A single traumatic brain injury (TBI), even when mild (ie, concussion), can cause lasting consequences. Individuals with a history of chronic (>1-year prior) mild TBI have an increased risk of mood disturbances (eg, depression, suicide). This population also has lingering sleep alterations, including poor sleep quality and changes in sleep stage proportions. Given these sleep deficits, we aimed to test whether sleep-dependent emotional memory consolidation is reduced in this population. We utilized a mild TBI group (3.7 ± 2.9 years post injury) and an uninjured (non-TBI) population. Methods: Participants viewed negative and neutral images both before and after a 12-hour period containing sleep ("Sleep" group) or an equivalent period of time spent awake ("Wake" group). Participants rated images for valence/arousal at both sessions, and memory recognition was tested at session two. Results: The TBI group had less rapid eye movement (REM), longer REM latency, and more sleep complaints. Sleep-dependent memory consolidation of nonemotional images was present in all participants. However, consolidation of negative images was only present in the non-TBI group. A lack of differentiation between the TBI Sleep and Wake groups was due to poor performance in the sleep group and, unexpectedly, enhanced performance in the wake group. Additionally, although the non-TBI participants habituated to negative images over a waking period, the TBI participants did not. Conclusions: We propose disrupted sleep-and wake-dependent emotional processing contributes to poor emotional outcomes following chronic, mild TBI. This work has broad implications, as roughly one-third of the US population will sustain a mild TBI during their lifetime.