The authors examined the role of cognitive operations in discriminations between externally and internally generated events (e.g., reality monitoring) in healthy and pathological aging. The authors used 2 reality-monitoring distinctions to manipulate the quantity and quality of necessary cognitive operations: discriminating between I performed versus I imagined performing and between I watched another perform versus I imagined another performing. Older adults had more difficulty than did younger adults when discriminating between memories in both versions of the task. In addition, older adults with Alzheimer's-type dementia showed marked difficulties when attributing a source to imagined actions. The authors interpret these findings in terms of an age difficulty or the failure to use cognitive operations as useful cues during source monitoring.