Prior semantic knowledge facilitates episodic recognition memory for faces. To examine the neural manifestation of the interplay between semantic and episodic memory, we investigated neuroelectric dynamics during the creation (study) and the retrieval (test) of episodic memories for famous and nonfamous faces. Episodic memory effects were evident in several EEG frequency bands: theta (4–8 Hz), alpha (9–13 Hz), and gamma (40–100 Hz). Activity in these bands was differentially modulated by preexisting semantic knowledge and by episodic memory, implicating their different functional roles in memory. More specifically, theta activity and alpha suppression were larger for old compared to new faces at test regardless of fame, but were both larger for famous faces during study. This pattern of selective semantic effects suggests that the theta and alpha responses, which are primarily associated with episodic memory, reflect utilization of semantic information only when it is beneficial for task performance. In contrast, gamma activity decreased between the first (study) and second (test) presentation of a face, but overall was larger for famous than nonfamous faces. Hence, the gamma rhythm seems to be primarily related to activation of preexisting neural representations that may contribute to the formation of new episodic traces. Taken together, these data provide new insights into the complex interaction between semantic and episodic memory for faces and the neural dynamics associated with mnemonic processes.