Age-related declines in spatial navigation are well-known in human and non-human species. Studies in non-human species suggest that alteration in hippocampal and other neural circuitry may underlie behavioral deficits associated with aging but little is known about the neural mechanisms of human age-related decline in spatial navigation. The purpose of the present study was to examine age differences in functional brain activation during virtual environment navigation. Voxel-based analysis of activation patterns in young subjects identified activation in the hippocampus and parahippocampal gyrus, retrosplenial cortex, right and left lateral parietal cortex, medial parietal lobe and cerebellum. In comparison to younger subjects, elderly participants showed reduced activation in the hippocampus and parahippocampal gyrus, medial parietal lobe and retrosplenial cortex. Relative to younger participants elderly subjects showed increased activation in anterior cingulate gyrus and medial frontal lobe. These results provide evidence of age specific neural networks supporting spatial navigation and identify a putative neural substrate for age-related differences in spatial memory and navigational skill.