Brain activity was measured with a whole head magnetoencephalograph (MEG) during the test phases of word recognition experiments. Healthy young subjects had to discriminate between previously presented and new words. During prior study phases two different levels of word processing were provided according to two different kinds of instructions (shallow and deep encoding). Event-related fields (ERFs) associated with falsely recognized words (false alarms) were found to depend on the depth of processing during the prior study phase. False alarms elicited higher brain activity (as reflected by dipole strength) in case of prior deep encoding as compared to shallow encoding between 300 and 500 ms after stimulus onset at temporal brain areas. Between 500 and 700 ms we found evidence for differences in the involvement of neural structures related to both conditions of false alarms. Furthermore, the number of false alarms was found to depend on depth of processing. Shallow encoding led to a higher number of false alarms than deep encoding. All data are discussed as strong support for the ideas that a certain level of word processing is performed by a distinct set of neural systems and that the same neural systems which encode information are reactivated during the retrieval.