Vivid memory for an episode generally includes memory for a central object or event plus memory for background context or source information. To assess neural differences between source and item memory, we used event-related potentials (ERPs) to monitor relevant memory processes at both encoding and retrieval. Participants fluent in Chinese studied Chinese words superimposed on a square or circular background during the study phase, followed by a 1-min delay. Then, memory was tested for both the words (items) and the corresponding background (source), or, in other blocks, tested for the words alone. ERPs to study-phase words differed as a function of whether the word was later remembered. These Dm effects in the interval from 400 to 600 ms, however, did not differ according to whether or not source was remembered. In contrast, ERPs to test-phase words showed clear old/new effects that did differ across conditions. When both item and source were remembered accurately, old/new effects emerged earlier and were larger in amplitude than when source memory was either incorrect or not queried. These results demonstrate that encoding processes indexed by ERPs may have primarily reflected encoding of the visual and semantic properties of these words, stressing item memory over source memory. Retrieval processes indexed by ERPs, in contrast, likely reflected a combination of item retrieval, source retrieval, and related processing engaged when people were remembering words seen earlier.