Patients who confabulate retrieve personal habits, repeated events or over-learned information and mistake them for actually experienced, specific unique events. Although some hypotheses favour a disruption of frontal/executive functions operating at retrieval, the respective involvement of encoding and retrieval processes in confabulation is still controversial. The present study sought to investigate experimentally the involvement of encoding and retrieval processes and the interference of over-learned information in the confabulation of Alzheimer's disease patients. Twenty Alzheimer's disease patients and 20 normal controls encoded and retrieved unknown stories, well-known fairy tales (e.g. Snow White) and modified well-known fairy tales (e.g. Little Red Riding Hood is not eaten by the wolf) under three experimental conditions: (i) full attention at encoding and at retrieval; (ii) divided attention at encoding (i.e. performing an attention demanding secondary task) and full attention at retrieval; (iii) full attention at encoding and divided attention at retrieval. We found that confabulations in Alzheimer's disease patients were more frequent for the modified well-known fairy tales and when encoding was weakened by a concurrent secondary task (61%), compared with the other types of stories and experimental conditions. Confabulations in the modified fairy tales always consisted of elements of the original version of the fairy tale (e.g. Little Red Riding Hood is eaten by the wolf). This is the first experimental evidence showing that poor encoding and over-learned information are involved in confabulation in Alzheimer's disease.