As we age we become increasingly susceptible to memory distortions and inaccuracies. Over the past decade numerous neuroimaging studies have attempted to illuminate the neural underpinnings of aging and false memory. Here we review these studies, and link their findings with those concerning the cognitive properties of age-related changes in memory accuracy. Collectively this evidence points towards a prominent role for age-related declines in medial temporal and prefrontal brain areas, and corresponding impairments in associative binding and strategic monitoring. A resulting cascade of cognitive changes contributes to the heightened vulnerability to false memories with age, including reduced recollective ability, a reliance on gist information and familiarity-based monitoring mechanisms, as well as a reduced ability to inhibit irrelevant information and erroneous binding of features between memory traces. We consider both theoretical and applied implications of research on aging and false memories, as well as questions remaining to be addressed in future research.