Differentiation models of recognition memory predict a strength-based mirror effect in the distributions of subjective memory strength. Subjective memory strength should increase for targets and simultaneously decrease for foils following a strongly encoded list compared with a weakly encoded list. An alternative explanation for the strength-based mirror effect is that participants adopt a stricter criterion following a strong list than a weak list. Behavioral experiments support the differentiation account. The purpose of this study was to identify the neural bases for these differences. Encoding strength was manipulated (strong, weak) in a rapid event-related fMRI paradigm. To investigate the effect of retrieval context on foils, foils were presented in test blocks containing strong or weak targets. Imaging analyses identified regions in which activity increased faster for foils tested after a strong list than a weak list. The results are interpreted in support of a differentiation account of memory and are suggestive that the angular gyrus plays a role in evaluating evidence related to the memory decision, even for new items.