Corticosteroid hormones secreted by the adrenal cortex protect the brain against adverse events and are essential for cognitive performance. However, in recent literature, the central action of corticosteroids has mostly been portrayed as damaging and disruptive to memory formation. We argue that this paradox can be explained by appreciating the specific role of both mineralocorticoid and glucocorticoid receptors in the various stages of information processing. In addition, the context in which corticosteroid-receptor activation takes place is crucial in determining steroid-mediated effects. These effects generally favour adaptive behaviour that is most relevant to the situation. Corticosteroid effects on cognition can, however, turn from adaptive into maladaptive, when actions via the two corticosteroid-receptor types are imbalanced for a prolonged period of time.