To investigate early effects of beta-amyloid (Aβ) on neuronal function, elderly normal controls (NCs, age range 58–97) were scanned with Pittsburgh Compound-B (PIB) positron emission tomography (a measure of Aβ) as well as functional magnetic resonance imaging (a measure of brain activation) while performing an episodic memory–encoding task of natural scenes (also performed by young NCs; age range 18–30). Relationships between Aβ and activation were assessed across task-positive (regions that activate for subsequently remembered vs. forgotten scenes) and task-negative regions (regions that deactivate for subsequently remembered vs. forgotten scenes). Significant task-related activation was present in a distributed network spanning ventrolateral prefrontal, lateral occipital, lateral parietal, posterior inferior temporal cortices, and the right parahippocampal/hippocampus, whereas deactivation was present in many default mode network regions (posteromedial, medial prefrontal, and lateral temporoparietal cortices). Task-positive activation was higher in PIB+ compared with PIB− subjects, and this activation was positively correlated with memory measures in PIB+ subjects. Although task deactivation was not impaired in PIB+ NCs, deactivation was reduced in old versus young subjects and was correlated with worse task memory performance among old subjects. Overall, these results suggest that heightened activation during episodic memory encoding is present in NC elderly subjects with high Aβ.