Adult hippocampal neurogenesis has been implicated in cognitive processes, such as pattern separation, and in the behavioural effects of stress and antidepressants. Young adult-born neurons have been shown to inhibit the overall activity of the dentate gyrus by recruiting local interneurons, which may result in sparse contextual representations and improved pattern separation. We propose that neurogenesis-mediated inhibition also reduces memory interference and enables reversal learning both in neutral situations and in emotionally charged ones. Such improved cognitive flexibility may in turn help to decrease anxiety-like and depressive-like behaviour.