Numerous behavioral studies have suggested that normal aging has deleterious effects on episodic memory and that recollection is disproportionately impaired relative to familiarity-based recognition. However, there is a wide degree of variability in memory performance within the aging population and this generalization may not apply to all elderly adults. Here we investigated these issues by using event-related potentials (ERPs) to measure the effects of aging on the neural correlates of recollection and familiarity in older adults with recognition memory performance that was equivalent to (old-high) or lower than (old-low) that of young adults. Results showed that, behaviorally, old-high subjects exhibited intact recollection but reduced familiarity, whereas old-low subjects had impairments in both recollection and familiarity, relative to the young. Consistent with behavioral results, old-high subjects exhibited ERP correlates of recollection that were topographically similar to those observed in young subjects. However, unlike the young adults, old-high subjects did not demonstrate any neural correlates of familiarity-based recognition. In contrast to the old-high group, the old-low group exhibited neural correlates of recollection that were topographically distinct from those of the young. Our results suggest that the effects of aging on the underlying brain processes related to recollection and familiarity are dependent on individual memory performance and highlight the importance of examining performance variability in normal aging.