Neural activity elicited during the encoding and retrieval of source information was investigated with event-related functional magnetic resonance imaging (efMRI). During encoding, 17 subjects performed a natural/artificial judgement on pictures of common objects which were presented randomly in one of the four quadrants of the display. At retrieval, old pictures were mixed with new ones and subjects judged whether each picture was new or old and, if old, indicated in which quadrant it was presented at encoding. During encoding, study items that were later recognized and assigned a correct source judgement elicited greater activity than recognized items given incorrect judgements in a variety of regions, including right lateral occipital and left prefrontal cortex. At retrieval, regions showing greater activity for recognized items given correct versus incorrect source judgements included the right hippocampal formation and the left prefrontal cortex. These findings indicate a role for these regions in the encoding and retrieval of episodic information beyond that required for simple item recognition.