First-degree family history (FH) of sporadic Alzheimer's disease and the apolipoprotein E epsilon4 allele (APOE4) are risk factors for Alzheimer's disease that may affect brain function prior to onset of clinical symptoms. In this functional MRI (fMRI) study, we used an episodic recognition task that required discrimination of previously viewed (PV) and novel (NV) faces to examine differences in blood oxygen level dependent (BOLD) signal due to risk factors in 74 middle-aged cognitively normal individuals. The group effects on this recognition task were tested with a 2 x 2 ANCOVA factorial design (+FH/-FH and +APOE4/-APOE4). There were significant APOE4 and FH effects in the left dorsal posterior cingulate cortex and precuneus, where decreased risk resulted in greater activity during recollection. Recognition performance was positively correlated with BOLD signal in the left posterior hippocampus, parahippocampal-retrosplenial gyrus and left superior frontal cortex regardless of risk factors. To examine condition-specific group effects, both the PV and NV faces were tested further in separate 2 x 2 ANCOVAs. Both models revealed an APOE effect, with the -APOE4 group showing stronger signal than the +APOE4 group in anterior cingulate cortices, while a FH effect was found in the dorsal cuneus and medial frontal cortices with the -FH group showing stronger signal than the +FH group. Finally, interactions between APOE4 and FH effects were found bilaterally in the fusiform gyrus. These results suggest that risk factors and cognitive performance each influence brain activity during recognition. The findings lend further support to the idea that functional brain changes may begin far in advance of symptomatic Alzheimer's disease.