Retracing a recently traveled route is a frequent navigation task when learning novel routes or exploring unfamiliar environments. In the present study we utilized virtual environments technology to investigate age-related differences in repeating and retracing a learned route. In the training phase of the experiment participants were guided along a route consisting of multiple intersections each featuring one unique landmark. In the subsequent test phase, they were guided along short sections of the route and asked to indicate overall travel direction (repetition or retracing), the direction required to continue along the route, and the next landmark they would encounter. Results demonstrate age-related deficits in all three tasks. More specifically, in contrast to younger participants, the older participants had greater problems during route retracing than during route repetition. While route repetition can be solved with egocentric response or route strategies, successfully retracing a route requires allocentric processing. The age-related deficits in route retracing are discussed in the context of impaired allocentric processing and shift from allocentric to egocentric navigation strategies as a consequence of age-related hippocampal degeneration.