It is still unknown how associative biological memories operate. Hopfield networks are popular models of associative memory, but they suffer from spurious memories and low efficiency. Here, we present a new model of an associative memory that overcomes these deficiencies. We call this model sparse associative memory (SAM) because it is based on sparse projections from neural patterns to pattern-specific neurons. These sparse projections have been shown to be sufficient to uniquely encode a neural pattern. Based on this principle, we investigate theoretically and in simulation our SAM model, which turns out to have high memory efficiency and a vanishingly small probability of spurious memories. This model may serve as a basic building block of brain functions involving associative memory.