We examined how aging affects the pattern of brain activity mediating retrieval under dual-task conditions. We used functional magnetic resonance imaging (fMRI) to measure brain activity in younger and older adults while they were engaged in an auditory verbal recognition test under either full or divided attention (FA or DA). During recognition under FA, older adults had more activity in bilateral dorsolateral prefrontal cortex (PFC). DA with a distracting task requiring animacy judgments to words disrupted memory more than did a task requiring odd-digit judgments to numbers. For both behavioural and brain measures we contrasted the two DA conditions to recognition under FA to identify interference with memory performance. Behaviourally, there were no age differences in the magnitude of memory interference from DA conditions, although recognition performance was poorer overall in older adults. During the DA animacy condition, younger adults showed an increase in recognition latency, and older adults an increase in distracting task costs. Younger adults in this condition showed an increase in left inferior PFC, coupled with a decrease in right hippocampal activity; these effects were diminished in older adults who instead showed an increase in bilateral middle frontal activity. During both DA conditions, older adults showed greater activity in posterior neocortex compared to the younger group. Results indicate that older adults are able to perform as well as younger adults on retrieval tasks under DA conditions due to two alterations in brain activity: a dampening of the changes characterizing younger adults during the DA animacy condition and greater recruitment of additional regions during both DA tasks.