Prior work has shown that when responses to incidentally encoded words are sorted, subsequently remembered words elicit greater left prefrontal BOLD signal change relative to forgotten words. Similarly, low-frequency words elicit greater activation than high-frequency words in the same left prefrontal regions, contributing to their better subsequent memorability. This study examined the relative contribution of encoding and retrieval processes to the correct recognition of target words. A mixture of high- and low-frequency words was incidentally encoded. Scanning was performed at encoding as well as during retrieval. During encoding, greater activation in the left prefrontal and anterior cingulate regions predicted a higher proportion of hits for low-frequency words. However, data acquired during recognition showed that word frequency did not modulate activation in any of the areas tracking successful recognition. This result demonstrates that under some circumstances, the recognition of studied words is determined purely by processes that are active during encoding. In contrast to the finding for hits, activation associated with correctly rejected foils was modulated by word frequency, being higher for high-frequency words in the left lateral parietal and anterior prefrontal regions. These findings were replicated in two further experiments, one in which the number of test items at recognition was doubled and another where encoding strength for high-frequency words was varied (once vs. 10 times). These results indicate that word frequency modulates activity in the left lateral parietal and anterior prefrontal regions contingent on whether the item involved is correctly recognized as a target or a foil. This observation is consistent with a dual process account of episodic memory.