When new events overlap with past events, there is a natural tradeoff between encoding the new event and retrieving the past event. Given the ubiquity of overlap among memories, this tradeoff between memory encoding and retrieval is of central importance to computational models of episodic memory (O’Reilly & McClelland 1994; Hasselmo 2005). However, prior studies have not directly linked neural markers of encoding/retrieval tradeoffs to behavioral measures of how overlapping events are remembered. Here, by decoding patterns of scalp electroencephalography (EEG) from male and female human subjects, we show that tradeoffs between encoding and retrieval states are reflected in distributed patterns of neural activity and, critically, these neural tradeoffs predict how overlapping events will later be remembered. Namely, new events that overlapped with past events were more likely to be subsequently remembered if neural patterns were biased toward a memory encoding state–or, conversely, away from a retrieval state. Additionally, we show that neural markers of encoding vs. retrieval states are surprisingly independent from previously-described EEG predictors of subsequent memory. Instead, we demonstrate that previously-described EEG predictors of subsequent memory are better explained by task engagement than by memory encoding, per se. Collectively, our findings provide important insight into how the memory system balances memory encoding and retrieval states and, more generally, into the neural mechanisms that support successful memory formation.