Background Numerous studies have shown that older adults have positive emotional bias. However, how sleep characteristics such as sleep continuity moderate this emotional bias in older adults is less understood. Objectives The present study aimed to determine whether positive emotional memory bias is associated with sleep continuity in older adults. Methods We recruited 92 community-dwelling older adults for a cross-sectional study. Participants underwent 1 week of objective actigraphic sleep monitoring and completed a visuospatial associative memory task at baseline and 1 week later. Results Older adults exhibited better memory performance for positive pictures than for neutral and negative pictures at baseline, and this positive emotional bias was maintained for at least 1 week. Crucially, this effect was moderated by sleep continuity: Older adults with shorter wake after sleep onset times (WASO) exhibited this positive bias, whereas those with longer WASO did not. Discussion The present results are the first to demonstrate that positive emotional bias is moderated by sleep continuity in older adults. These findings have implications for emotion regulation in older adults and highlight the need for targeted interventions to increase their sleep continuity, which may help to improve emotional processing in this population.