Elderly persons exceed young adults in false recognitions of new faces. One account claims there are age-related deficits in memory for context of encounter with faces. Because of these deficits, elderly persons frequently recognize faces on the basis of perceived familiarity (i.e., resemblance to face representations in memory), which is high for some new faces. To test this context-recollection hypothesis, we had young adult and elderly subjects judge whether faces: (1) had been seen previously in a test (though no face was repeated), and (2) were subjectively familiar (though no face was famous). The elderly exceeded the young subjects in seen-before judgements (false recognitions), and only the elderly showed a positive correlation between false recognitions and subjective familiarity. In Experiment 2, this finding was extended from false recognitions to correct recognitions, supporting the view that elderly persons, compared to young adults, rely more on resemblance in recognizing faces.