The threat of being judged stereotypically (stereotype threat) may impair memory performance in older adults, thereby producing inflated age differences in memory tasks. However, the underlying mechanisms of stereotype threat in older adults or other stigmatized groups remain poorly understood. Here, we offer evidence that stereotype threat consumes working memory resources in older adults. More important, using a process-dissociation procedure, we found, for the first time, that stereotype threat undermines the controlled use of memory and simultaneously intensifies automatic response tendencies. These findings indicate that competing models of stereotype threat are actually compatible and offer further reasons for researchers and practitioners to pay special attention to age-related stereotypes during standardized neuropsychological testing.