The present study examined age-related differences in the misinformation effect for objects that were consistent or inconsistent with their environmental settings. Young and older adults viewed one of two slide sequences, each containing context-consistent items (e.g., a blender in a kitchen setting or a saw in a woodshop setting) and context-inconsistent items (a saw in a kitchen setting or a blender in a woodshop setting). After receiving misinformation through post-event narratives, participants received tests of yes/no recognition requiring remember/know judgments (Experiments 1–3) and source monitoring (Experiments 2 and 3) for slide details. Although age-related differences in the misinformation effect were nonreliable, older adults tended to report misinformation as remembered more often than young adults, and source monitoring tests reduced the misinformation effect for both age groups. Misinformation effects were equivalent or larger for inconsistent objects than for consistent objects. Theoretical and practical implications of these results are discussed. Copyright © 2013 John Wiley & Sons, Ltd.