Segmenting ongoing activity into events is important for later memory of those activities. In the experiments reported in this article, older adults' segmentation of activity into events was less consistent with group norms than younger adults' segmentation, particularly for older adults diagnosed with mild dementia of the Alzheimer type. Among older adults, poor agreement with others' event segmentation was associated with deficits in recognition memory for pictures taken from the activity and memory for the temporal order of events. Impaired semantic knowledge about events also was associated with memory deficits. The data suggest that semantic knowledge about events guides encoding, facilitating later memory. To the extent that such knowledge or the ability to use it is impaired in aging and dementia, memory suffers.