Aging comes with declines in episodic memory. Memory decline is accompanied by structural and functional alterations within key brain regions, including the hippocampus and lateral prefrontal cortex, as well as their affiliated default and frontoparietal control networks. Most studies have examined how structural or functional differences relate to memory independently. Here we implemented a multimodal, multivariate approach to investigate how interactions between individual differences in structural integrity and functional connectivity relate to episodic memory performance in healthy aging. In a sample of younger ( = 111; mean age, 22.11 years) and older ( = 78; mean age, 67.29 years) adults, we analyzed structural MRI and multiecho resting-state fMRI data. Participants completed measures of list recall (free recall of words from a list), associative memory (cued recall of paired words), and source memory (cued recall of the trial type, or the sensory modality in which a word was presented). The findings revealed that greater structural integrity of the posterior hippocampus and middle frontal gyrus were linked with a pattern of increased within-network connectivity, which together were related to better associative and source memory in older adulthood. Critically, older adults displayed better memory performance in the context of decreased hippocampal volumes when structural differences were accompanied by functional reorganization. This functional reorganization was characterized by a pruning of connections between the hippocampus and the limbic and frontoparietal control networks. Our work provides insight into the neural mechanisms that underlie age-related compensation, revealing that the functional architecture associated with better memory performance in healthy aging is tied to the structural integrity of the hippocampus and prefrontal cortex.