The ability to retrieve temporal and spatial context information from memory declines with healthy aging. The hippocampus (HC) has been shown to be associated with successful encoding and retrieval of spatio-temporal context, versus item recognition information (Davachi, Mitchell, & Wagner, 2003; Nadel, Samsonovich, Ryan, & Moscovitch, 2000; Ross & Slotnick, 2008). Aging has been linked to volume reduction in the HC (Bouchard, Malykhin, Martin, Hanstock, Emery, Fisher, & Camicioli, 2008; Malykhin, Bouchard, Camicioli, & Coupland, 2008; Raz et al., 2005). As such, age-associated reductions in anterior HC volume may contribute to the context memory deficits observed in older adults. In the current MRI study we investigated whether item recognition, spatial context and temporal context memory performance would be predicted by regional volumes in HC head (HH), body (HB) and tail (HT) volumes, using within group multiple regression analyses in a sample of 19 healthy young (mean age 24.3) and 20 older adults (mean age 67.7). We further examined between age-group differences in the volumes of the same HC sub-regions. Multiple regression analyses revealed that in younger adults both spatial and temporal context retrieval performance was predicted by anterior HC volume. Older age was associated with significant volume reductions in HH and HB, but not HT; and with reduced ability to retrieve spatial and temporal contextual details from episodic memory. However, HC volumes did not predict context retrieval performance in older adults. We conclude that individual differences in anterior, not posterior, HC volumes predict context memory performance in young adults. With age there may be a posterior-to-anterior shift from using HC-related processes, due to HC volume loss, to employing the prefrontal cortex to aid in the performance of cognitively demanding context memory tasks. However, due to concomitant changes in the prefrontal system with age, there are limits to compensation in the aging brain.