Recent studies show that sleep reduces intrusive memories after analog trauma. This effect is assumed to be caused by sleep's impact on memory consolidation. However, the underlying processes of this phenomenon have not been uncovered. Thus, the current study investigates the hypothesis that sleep reduces intrusive memories by supporting the selective consolidation of relevant memories. Seventy-five participants were exposed to traumatic picture stories before nocturnal sleep or wakefulness during daytime. Memory for relevant and irrelevant trauma-associated stimuli was assessed prior to and after the retention period. Consistent with the hypothesis, results demonstrate reduced memory loss for relevant as opposed to irrelevant trauma-associated stimuli after sleep but not after wakefulness. Moreover, an incremental retention benefit for relevant trauma-associated stimuli was negatively correlated with the number of intrusive trauma memories after wakefulness. These results suggest that lack of sleep impairs selective gating of relevant trauma-associated memories, thereby enhancing intrusion development after trauma. •Retention benefit for relevant trauma-associated stimuli after sleep.•Post-wake retention benefit for relevant stimuli correlated with fewer intrusions.•Lack of sleep may impair selective gating of relevant trauma-associated memories.•Impairments of gating may enhance intrusion development after trauma.