In order to explore the neural correlates of age-related changes in visual perception of faces, positron emission tomographic scans were obtained on young and old adults while they were engaged in tasks of nondegraded and degraded face matching. Old adults were less accurate than were young adults across all face matching conditions, although the age difference was greatly reduced when degraded performance was adjusted for nondegraded performance. The interaction of age and degree of degradation on performance measures was not significant. Brain activity patterns during nondegraded face matching were similar in the two groups with some differences in parietal and prestriate cortices (greater activity in young adults) and in prefrontal cortex, thalamus, and hippocampus (greater activity in old adults). Increases in activity related to increasing degradation of the faces were seen mainly in prefrontal cortices in both age groups. Despite this similarity in the brain response to face degradation, there were striking differences between groups in the correlations between brain activity and degraded task performance. Different regions of extrastriate cortex were positively correlated with behavioural measures in the two groups (fusiform gyrus in the young adults and posterior occipital regions in old adults). In addition two areas where older adults showed greater activity during nondegraded face matching, thalamus and hippocampus, also showed positive correlations with behaviour during the degraded tasks in this group, but not in the young group. Thus, although the elderly are not more vulnerable to the effects of increasing face degradation, the brain systems involved in carrying out these visual discriminations in young and old adults are not the same. These results are consistent with the idea of functional plasticity in face processing over the life span.