Understanding physiological changes that precede irreversible tissue damage in age-related pathology is central to optimizing treatments that may prevent, or delay, cognitive decline. Cerebral perfusion is a tightly regulated physiological property, coupled to tissue metabolism and function, and abnormal (both elevated and reduced) hippocampal perfusion has been reported in a range of cognitive disorders. However, the size and location of the hippocampus complicates perfusion quantification, as many perfusion techniques acquire data with spatial resolution on the order of or beyond the size of the hippocampus, and are thus suboptimal in this region (especially in the presence of hippocampal atrophy and reduced flow scenarios). Here, the relationship between hippocampal perfusion and atrophy as a function of memory performance was examined in cognitively normal healthy older adults (n = 20; age=67 ± 7 yr) with varying genetic risk for dementia using a custom arterial spin labeling acquisition and analysis procedure. When controlling for hippocampal volume, it was found that hippocampal perfusion correlated inversely (P = 0.04) with memory performance despite absent hippocampal tissue atrophy or white matter disease. The hippocampal flow asymmetry (left hippocampus perfusion–right hippocampus perfusion) was significantly (P = 0.04) increased in APOE-ϵ4 carriers relative to noncarriers. These findings demonstrate that perfusion correlates more strongly than tissue volume with memory performance in cognitively normal older adults, and furthermore that an inverse trend between these two parameters suggests that elevation of neuronal activity, possibly mediated by neuroinflammation and/or excitation/inhibition imbalance, may be closely associated with minor changes in memory performance. © 2012 Wiley Periodicals, Inc.