Misattribution refers to the act of attributing a memory or idea to an incorrect source, such as successfully remembering a bit of information but linking it to an inappropriate person or time [Jacoby, L. L., Kelley, C., Brown, J., & Jasechko, J. (1989). Becoming famous overnight: Limits on the ability to avoid unconscious influences of the past. Journal of Personality and Social Psychology, 56, 326–338; Schacter, D. L. (1999). The seven sins of memory: Insights from psychology and cognitive neuroscience. American Psychologist, 54, 182–203; Schacter, D. L. (2001). The seven sins of memory: How the mind forgets and remembers. Boston: Houghton Mifflin]. Cognitive studies have suggested that misattribution errors may occur in the absence of recollection for the details of an initial encounter with a stimulus, but little is known about the neural basis of this memory phenomenon. Here we used functional magnetic resonance imaging (fMRI) to examine the hypothesized role of recollection in counteracting the illusory truth effect, a misattribution error whereby perceivers systematically overrate the truth of previously presented information. Imaging was conducted during the encoding and subsequent judgment of unfamiliar statements that were presented as true or false. Event-related fMRI analyses were conditionalized as a function of subsequent performance. Results demonstrated that encoding activation in regions previously associated with successful recollection—including the hippocampus and the ventrolateral prefrontal cortex (PFC)—correlated with the successful avoidance of misattribution errors, providing initial neuroimaging support for earlier cognitive accounts of misattribution.