Flexible mnemonic mechanisms that adjust to different internal mental states can provide a major adaptive advantage. However, little is known regarding how this flexibility is achieved in the human brain. We examined brain activity during retrieval of false memories of a movie, generated by exposing participants to misleading information. Half of the participants suspected the memory manipulation (Distrustful), whereas the other half did not (Naive). Distrustful displayed more accurate memory performance and a brain signature different than that of Naive. In Distrustful, the ability to differentiate true from false information was driven by a qualitatively distinct hippocampal activity for endorsed items, consistent with the view that hippocampal encoding allows recollection of a specific source. Conversely, in Naive, BOLD differences between true and false memories were linearly correlated with accuracy across participants, suggesting that Naive subjects needed to reinstate and evaluate stored information to discern true from false. We propose that our results lend support to models suggesting that hippocampal activity can exhibit different computational schemes, depending on memorandum attributes. Furthermore, we show that trust, considered as a subjective state of mind, may alter basic hippocampal strategies, influencing the ability to separate real from false memory. (c) 2014 Wiley Periodicals, Inc.