Abstract Recent evidence has shown that older adults fail to show adaptation in the right fusiform gyrus (FG) to the same face presented repeatedly, despite accurate detection of the previously presented face. We used functional magnetic resonance imaging to investigate whether this phenomenon is associated with age-related reductions in face specificity in brain activity and whether older adults compensate for these face-processing deficiencies by increasing activity in other areas within the face-processing network, or outside this network. A comparison of brain activity across multiple stimulus categories showed that, unlike young adults who engaged a number of brain regions specific to face processing, older adults generalized these patterns of activity to objects and houses. Also, young adults showed functional connectivity between the right FG and its homologous region during face processing, whereas older adults did not engage the left FG but showed a functional connection between the right FG and left orbitofrontal cortex. Finally, this frontotemporal functional connection was activated more strongly in older adults who performed better on a face-matching task (done outside of the scanner), suggesting increased involvement of this functional link for successful face recognition with increasing age. These findings suggest that 2 neural mechanisms, dedifferentiation and compensatory neural recruitment, underlie age differences in face processing.