Imagery Rescripting (ImRs) is an effective intervention for reducing distress associated with aversive memories, yet the cognitive mechanisms underlying its effects remain poorly understood. This study examined whether reinstating the original context of a memory during ImRs enhances emotional change by facilitating inferential linking between original and rescripted memory elements. In a three-day experimental paradigm, 63 participants encoded, rescripted, and later recalled aversive imagined events. The study investigated the relationships between contextual reinstatement, inference performance, and reductions in distress following rescripting. While ImRs was associated with substantial reductions in distress, the findings provide new insights into the role of contextual processing and memory integration during emotional memory updating.