Accuracy in identifying a perceptually degraded word (e.g., stake) can be either enhanced by recent exposure to the same stimulus or reduced by recent exposure to a similar stimulus (e.g., stare). In the present study, we explored the mechanisms underlying these benefits and costs by examining the performance of amnesic and control groups in a forced choice perceptual identification (FCPI) task in which briefly flashed words (that were identical to studied words, similar to studied words, or new) had to be identified, and two response choices were provided that differed from each other by one letter. Control participants showed a performance benefit and cost in FCPI with both high- and low-frequency words. Amnesic participants showed a benefit (but no cost) with high-frequency words and a benefit and a cost with low-frequency words. The benefit/cost pattern with low-frequency words in amnesia was obtained even when the to-be-identified stimulus in the FCPI task was eliminated (Experiment 2), suggesting that this effect was driven by processes operating at the level of the response choices. Our findings suggest that implicit memory effects in FCPI reflect the operation of multiple mechanisms, the relative contributions of which may vary with the frequency of the test stimuli. The results also highlight the need for caution in interpreting results from normal participants in the FCPI task, since those findings may reflect a contribution of explicit memory processes.