How does viewers’ knowledge guide their attention while they watch everyday events, how does it affect their memory, and does it change with age? Older adults have diminished episodic memory for everyday events, but intact semantic knowledge. Indeed, research suggests that older adults may rely on their semantic memory to offset impairments in episodic memory, and when relevant knowledge is lacking, older adults’ memory can suffer. Yet, the mechanism by which prior knowledge guides attentional selection when watching dynamic activity is unclear. To address this, we studied the influence of knowledge on attention and memory for everyday events in young and older adults by tracking their eyes while they watched videos. The videos depicted activities that older adults perform more frequently than young adults (balancing a checkbook, planting flowers) or activities that young adults perform more frequently than older adults (installing a printer, setting up a video game). Participants completed free recall, recognition, and order memory tests after each video. We found age-related memory deficits when older adults had little knowledge of the activities, but memory did not differ between age groups when older adults had relevant knowledge and experience with the activities. Critically, results showed that knowledge influenced where viewers fixated when watching the videos. Older adults fixated less goal-relevant information compared to young adults when watching young adult activities, but they fixated goal-relevant information similarly to young adults, when watching more older adult activities. Finally, results showed that fixating goal-relevant information predicted free recall of the everyday activities for both age groups. Thus, older adults may use relevant knowledge to more effectively infer the goals of actors, which guides their attention to goal-relevant actions, thus improving their episodic memory for everyday activities.