Recent research has shown that memory illusions can successfully prime both children's and adults' performance on complex, insight-based problems (compound remote associates tasks or CRATs). The current research aimed to clarify the locus of these priming effects. Like before, Deese-Roediger-McDermott (DRM) lists were selected to prime subsequent CRATs such that the critical lures were also the solution words to a subset of the CRATs participants attempted to solve. Unique to the present research, recognition memory tests were used and participants were either primed during the list study phase, during the memory test phase, or both. Across two experiments, primed problems were solved more frequently and significantly faster than unprimed problems. Moreover, when participants were primed during the list study phase, subsequent solution times and rates were considerably superior to those produced by those participants who were simply primed at test. Together, these are the first results to show that false-memory priming during encoding facilitates problem-solving in both children and adults.