Neuroimaging research on the brain basis of memory decline in older adults typically has examined age-related changes either in structure or in function. Structural imaging studies have found that smaller medial temporal lobe (MTL) volumes are associated with lower memory performance. Functional imaging studies have found that older adults often exhibit bilateral frontal-lobe activation under conditions where young adults exhibit unilateral frontal activation. As yet, no one has examined whether these MTL structural and frontal-lobe functional findings are associated. In this study, we tested whether these findings were correlated in a population of healthy older adults in whom we previously demonstrated verbal memory performance was positively associated with left entorhinal cortex volume in the MTL (Rosen et al., 2003) and right frontal lobe activation during memory encoding (Rosen et al., 2002). Thirteen, non-demented, community-dwelling older adults participated both in a functional MRI (fMRI) study of verbal memory encoding and structural imaging. MRI-derived left entorhinal volume was measured on structural images and entered as a regressor against fMRI activation during verbal memory encoding. Right frontal activation (Brodmann's Area 47/insula) was positively correlated with left entorhinal cortex volume. These findings indicate a positive association between MTL volume and right frontal-lobe function that may underlie variability in memory performance among the elderly, and also suggest a two-stage model of memory decline in aging.