According to prominent theories of aging, the brain may reorganize to compensate for neural deterioration and prevent or offset cognitive decline. A frequent and striking finding in functional imaging studies is that older adults recruit additional regions relative to young adults performing the same task. This is often interpreted as evidence for functional reorganization, suggesting that, as people age, different regions or networks may support the same cognitive functions. Associations between additional recruitment and better performance in older adults have led to the suggestion that the additional recruitment may contribute to preserved cognitive function in old age and may explain some of the variation among individuals in preservation of function. However, many alternative explanations are possible, and recent findings and methodological developments have highlighted the need for more systematic approaches to determine whether reorganization occurs with age and whether it benefits performance. We reevaluate current evidence for compensatory functional reorganization in the light of recent moves to address these challenges.