Results from neuroimaging studies of long-term memory (LTM) encoding have contributed to the view that the ventrolateral prefrontal cortex (VLPFC) contributes to successful LTM formation, whereas the dorsolateral prefrontal cortex (DLPFC) does not. We hypothesized that the DLPFC does contribute to LTM, but under specific circumstances. That is, the DLPFC may be critical for building relationships between items during on-line processing, and this may promote LTM for associations between items. We used event-related functional magnetic resonance imaging (fMRI) to test this hypothesis by examining brain activity during sequential encoding of unrelated word pairs. During presentation of the second ("target") word in each pair, subjects either made a semantic judgment specific to the target word ("item-specific" trials), or a semantic judgment that involved a comparison between the target word and the first word in the pair ("relational" trials). Behaviorally, recognition memory for target words was equivalent between the two trial types but associative recognition of studied word pairs was significantly greater for relational trials. fMRI results showed that DLPFC activity was greater during relational compared with item-specific encoding and that DLPFC activity predicted successful memory for associations but not successful item memory. Activity in the VLPFC was also greater for relational compared with item-specific encoding, but VLPFC activation predicted successful memory for both associations and items. These results support the view that the DLPFC may contribute to LTM through its role in active processing of relationships during encoding, whereas the VLPFC may have a more general role in promoting successful LTM formation.