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Episodic memory improves during childhood and this improvement has been associated with age differences in hippocampal function, but previous research has not manipulated the possible underlying mechanisms. We tested the hypothesis that age-related differences in hippocampal activation may reflect changes in retrieval flexibility. We expected these activation differences to be observed most prominently in the anterior hippocampus. Functional magnetic resonance imaging (fMRI) data were collected from children ages 8 and 10, and adults (N = 63) during an associative recognition task that required participants to recognize pairs of pictures which either appeared in the same location as during encoding (Same location), or in a flipped location, such that each picture switched their location with the other member of the pair (Flipped location). Recognition of same-location pairs placed lower demands on flexible retrieval compared to recognition of flipped-location pairs. Behaviorally, 8-year-olds exhibited the strongest correct recognition gains for same-location compared to flipped-location pairs, and females unexpectedly outperformed males across all ages. When we examined correct recognition, adults recruited the hippocampal head more strongly for flipped- versus same-location pairs compared to both groups of children; in contrast both adults and 10-year-olds recruited the hippocampal tail more strongly for flipped- versus same-location pairs compared to 8-year-olds. This pattern was stronger in the left hippocampus and for females. Moreover hippocampal discrimination between recognized and forgotten items in the same-location condition was stronger in 8-year-olds compared to adults, and was stronger in the flipped-location condition in adults compared to 8-year-olds; this pattern was stronger in the left hippocampus. Individual differences in this discrimination contrast for flipped-location trials in the head and body predicted performance on an index of creative thinking. Overall, these results lend new support to the idea that hippocampal development may reflect change in retrieval flexibility with implications for additional forms of flexible cognition., (© 2015 Wiley Periodicals, Inc.)