Repetition priming refers to a form of implicit memory in which prior exposure to a stimulus facilitates the subsequent processing of the same or a related stimulus. One frequently used repetition priming task is word-stem completion priming. In this task, participants complete a series of beginning word stems with the first word that comes to mind after having viewed, in an unrelated context, words that can complete some of the stems. Patients with Alzheimer's disease (AD) exhibit a significant deficit in word-stem completion priming, but the neural mechanisms underlying this deficit have yet to be identified. The present study examined the possibility that the word-stem completion priming deficit in AD is due to disruption of ascending neuromodulatory systems that mediate cortical arousal by comparing word-stem completion priming and behavioral measures of spatial orienting and phasic alerting. Results showed that in healthy elderly controls higher levels of phasic alerting were associated with a sharpening of the temporal dynamics of priming across two delay intervals: those with higher levels of alerting showed more immediate priming but less delayed priming than those with lesser levels of alerting. In patients with AD, priming was impaired despite intact levels of phasic alerting and spatial orienting, and group status rather than individual levels of alerting or orienting predicted the magnitude of their stem-completion priming. Furthermore, the change in priming across delays they displayed was not related to level of alerting or orienting. These findings support the role of the noradrenergic projection system in modulating the level of steady-state cortical activation (or “cortical tonus”) underlying both phasic alerting and the temporal dynamics of repetition priming. However, impaired priming in patients with AD does not appear to be due to disruption of this neuromodulatory system.