Three experiments investigated the effects of divided attention at encoding and retrieval on false recognition. In Experiment 1, participants studied word lists in either full or divided attention (random number generation) conditions and then took part in a recognition test with full attention. In Experiment 2, after studying word lists with full attention, participants carried out a recognition test with either full or divided attention. Experiment 3 manipulated attention at both study and test. We also compared Deese/Roediger-McDermott (DRM) and categorized lists, due to recent claims regarding the locus of false memories produced by such lists (Smith, Gerkens, Pierce, & Choi, 2002). With both list types, false “remember” responses were reduced by divided attention at encoding and increased by divided attention at retrieval. The findings suggest that the production of false memories occurs as a result of the generation of associates at encoding and failures of source monitoring retrieval. Crucially, this is true for both DRM and categorized lists.