Electrophysiological studies have demonstrated that theta-band activity is useful for investigating neural mechanisms of memory. However, mechanisms specifically driving memory performance remain poorly understood. In sequential memory, performance can be artificially attenuated by shortening the inter-stimulus interval (ISI) between memory item presentations. Therefore, we sought to clarify the mechanisms of sequential memory performance by analyzing theta-band (4–8 Hz) activity recorded via magnetoencephalogram in 33 participants during performance of a sequential memory task where memory items were presented at either slow or fast rates in accordance with longer or shorter ISIs, respectively. Particularly in the slow task, theta activity clearly modulated in accordance with the presentation of memory items. Common cortical target regions in the occipital and frontal cortex were identified in both tasks and related to visual encoding and memory maintenance, respectively. Compared to the slow task, occipital-theta activity was significantly lower in the fast task from the midterm until the ending of encoding, in correspondence with significantly lower recall for memory items in this same period. Meanwhile, despite a loss of clarity in responsiveness to individual memory items in the fast task, frontal-theta activity was not different between tasks and exhibited particularly strong responses in both tasks during the holding period prior to recall. Our results indicate that shorter processing time erodes sequential memory performance beginning at the level of visual encoding.