The effect of emotion on prospective memory on those of different age groups and its neural mechanism in Chinese adults are still unclear. The present study investigated the effect of emotion on prospective memory during the encoding and retrieval phases in younger and older adults by using event-related potentials (ERPs). In the behavioral results, a shorter response time was found for positive prospective memory cues only in older group. In the ERP results, during the encoding phase, an increased late positive potential (LPP) was found for negative prospective memory cues in younger adults, while the amplitude of the LPP was marginally greater for positive prospective memory cues than for negative prospective memory cues in older adults. Correspondingly, younger adults showed an increased parietal positivity for negative prospective memory cues, while an elevated parietal positivity for positive prospective memory cues was found in older adults during the retrieval phase. This finding reflects the increased attentional processing of encoding and the more cognitive resources recruited to carry out a set of processes that are associated with the realization of delayed intentions when the prospective memory cues are emotional. The results reveal the effect of emotion on prospective memory during the encoding and retrieval phases in Chinese adults, modulated by aging, as shown by a positivity effect on older adults and a negativity bias in younger adults.