OBJECTIVE: To examine alterations in patterns of brain activation seen in normal aging and in mild Alzheimer's disease by functional magnetic resonance imaging (fMRI) during an associative encoding task. METHODS: 10 young controls, 10 elderly controls, and seven patients with mild Alzheimer's disease were studied using fMRI during a face-name association encoding task. The fMRI paradigm used a block design with three conditions: novel face-name pairs, repeated face-name pairs, and visual fixation. RESULTS: The young and elderly controls differed primarily in the pattern of activation seen in prefrontal and parietal cortices: elderly controls showed significantly less activation in both superior and inferior prefrontal cortices but greater activation in parietal regions than younger controls during the encoding of novel face-name pairs. Compared with elderly controls, the Alzheimer patients showed significantly less activation in the hippocampal formation but greater activation in the medial parietal and posterior cingulate regions. CONCLUSIONS: The pattern of fMRI activation during the encoding of novel associations is differentially altered in the early stages of Alzheimer's disease compared with normal aging.