The hippocampus creates distinct episodes from highly similar events through a process called pattern separation and can retrieve memories from partial or degraded cues through a process called pattern completion. These processes have been studied in humans using tasks where participants must distinguish studied items from perceptually similar lure items. False alarms to lures (incorrectly reporting a perceptually similar item as previously studied) are thought to reflect pattern completion, a retrieval-based process. However, false alarms to lures could also result from insufficient encoding of studied items, leading to impoverished memory of item details and a failure to correctly reject lures. The current study investigated the source of lure false alarms by comparing eye movements during the initial presentation of items to eye movements made during the later presentation of item repetitions and similar lures in order to assess mnemonic processing at encoding and retrieval, respectively. Relative to other response types, lure false alarms were associated with fewer fixations to the initially studied items, suggesting that false alarms result from impoverished encoding. Additionally, lure correct rejections and lure false alarms garnered more fixations than hits, denoting additional retrieval-related processing. The results suggest that measures of pattern separation and completion in behavioral paradigms are not process-pure.