An experiment is reported that examines age-related differences in the lag effect and its relation to retention interval. A total of 30 young and 30 older adults received both once-presented pairs and twice-presented pairs that were tested in a continuous cued-recall paradigm either after a short retention interval (2 pairs intervening between the last presentation of a pair and its test) or a long retention interval (20 pairs intervening between the last presentation of a pair and its test). In addition, the twice-presented pairs were separated by either 0, 1, 4, 8, or 20 intervening pairs. The results replicated the interaction between retention interval and lag that has been reported by Glenberg (1976, Journal of Verbal Learning and Verbal Behavior, 15, 1-16). Furthermore, although the older adults performed considerably lower than the younger adults in overall recall performance, their data were remarkably similar to the younger adults in the patterning of means. A mathematical modeling procedure was used to fit the data to Estes' stimulus fluctuation model. The results of this modeling procedure suggest that, compared with younger adults, older adults (a) encode less contextual information at a given point in time and (b) have a slower rate of contextual fluctuation across time.