A long-standing assumption in the cognitive aging literature is that performance on working memory (WM) tasks involving serial recall is relatively unaffected by aging, whereas tasks that require the rearrangement of items prior to recall are more age-sensitive. Previous neuroimaging studies of WM have found age-related increases in neural activity in frontoparietal brain regions during simple maintenance tasks, but few have examined whether there are age-related differences that are specific to rearranging WM items. In the current study, older and younger adults' brain activity was monitored using functional magnetic resonance imaging (fMRI) as they performed WM tasks involving either maintenance or manipulation (letter-number sequencing). The paradigm was developed so that performance was equivalent across age groups in both tasks, and the manipulation condition was not more difficult than the maintenance condition. In younger adults, manipulation-related increases in activation occurred within a very focal set of regions within the canonical brain WM network, including left posterior prefrontal cortex and bilateral inferior parietal cortex. In contrast, older adults showed a much wider extent of manipulation-related activation within this WM network, with significantly increased activity relative to younger adults found within bilateral PFC. The results suggest that activation and age-differences in lateral PFC engagement during WM manipulation conditions may reflect strategy use and controlled processing demands rather than reflect the act of manipulation per se.