<p>Adverse childhood experiences (ACEs), including abuse, neglect, and household dysfunction, have been linked to cognitive and emotional impairments. Due to the severity of impairments, researchers have examined protective factors to reduce the risk of adverse outcomes. However, there is limited research on ACEs and item and source memory and whether grit may attenuate deficits in memory and mental health distress. Participants (<i>N</i> = 215, <i>M</i>_<i>age</i> = 21.10) completed an item and source memory task. An encoding phase presented faces on colored backgrounds representing a threatening and safety condition. During the testing phase, participants identified previously seen faces (item memory) and their condition (source memory). Participants then completed measures of ACEs, grit, depression, and anxiety. Results revealed better source memory in high abuse than low abuse groups and inverse relationships with ACEs and anxiety and depression levels. Grit, particularly sustained effort, reduced perceived threat credibility and mediated the relationship between ACEs and mental health, with higher ACEs associated with lower grit, and lower grit linked to increased anxiety and depression. These findings support differential effects on source memory by type of ACEs, but not for item memory. Importantly, interventions targeting grit may improve mental health outcomes and well-being in trauma-exposed individuals.</p>