Impaired memory is a hallmark of prodromal Alzheimer's disease (AD). Prior knowledge associated with the memoranda improves memory in healthy individuals, but we ignore whether the same occurs in early AD. We used functional MRI to investigate whether prior knowledge enhances memory encoding in early AD, and whether the nature of this prior knowledge matters. Patients with early AD and Controls underwent a task-based fMRI experiment where they learned face-scene associations. Famous faces carried pre-experimental knowledge (PEK), while unknown faces with which participants were familiarized prior to learning carried experimental knowledge (EK). Surprisingly, PEK strongly enhanced subsequent memory in healthy controls, but importantly not in patients. Partly nonoverlapping brain networks supported PEK vs. EK associative encoding in healthy controls. No such networks were identified in patients. In addition, patients displayed impaired activation in a right sub hippocampal region where activity predicted successful associative memory formation for PEK stimuli. Despite the limited sample sizes of this study, these findings suggest that the role prior knowledge in new learning might have been so far overlooked and underestimated in AD patients. Prior knowledge may drive critical differences in the way healthy elderly and early AD patients learn novel associations.