Under cognitive load theory, time pressure/urgency-induced arousal is a major contributor to pupil dilation during cognition. However, pupillometric encoding studies have failed to consider the possible role of time pressure/urgency effects, instead often assuming that encoding dilations directly reflect encoding strength. To isolate possible encoding strength and time pressure effects, we manipulated levels of processing (deep vs. shallow) and response deadlines (speeded vs. unspeeded) during verbal recognition memory encoding. Rather than reflecting encoding strength, pupil dilation signaled time pressure and decision urgency, as indicated by four findings. First, dilation was greater for speeded than unspeeded trials, yet later recognition was similar. Second, within every combination of levels of processing and response deadline, slower individual decisions yielded increased dilations compared to quicker decisions. Third, even when encoding dilations during deep and shallow tasks were closely matched, later recognition remained markedly higher for the deep trials. Finally, within every combination of levels of processing and response deadline, dilation levels were similar for items subsequently recognized (hits) versus subsequently forgotten (misses). Taken together, our results support a time pressure/decision urgency account: instead of directly reflecting encoding efficacy, pupillary dilation mainly reflects the arousal induced by an increasingly urgent demand to process information. In the discussion section, we consider other possible paradigms during which arousal-based dilations may forecast subsequent memory outcomes, unlike here. Nonetheless, we emphasize that even in these situations, the proximal cause of dilation would be the time pressure or urgency of information processing.