The positivity effect in older adults (i.e., over 60 years old) has been demonstrated across a wide range of stimuli with a wide range of experimental paradigms that are designed to assess memory; however, very little research has investigated the positivity effect in semantic memory. The Deese-Roediger-McDermott (DRM) paradigm is one of the best procedures to investigate age-related changes in the key cognitive mechanisms of semantic memory, including associative activation and gist extraction. Here we used the DRM paradigm to investigate whether mood, particularly positive mood, at the time of encoding would influence age-related differences in semantic memory in younger and older adults. Participants were induced into a positive, negative, or neutral mood and were then presented with word lists consisting of positive, negative, or neutral words. Older relative to younger adults exhibited higher true recognition for positive over negative words, but this pattern was not shown in false recognition. When participants were induced in positive moods, older adults exhibited more false recognition than did young adults. The age-related difference in false recognition, however, had nothing to do with the valence of information. Taken together, these findings support Socioemotional Selectivity Theory, a life span theory of motivation, and Fuzzy-Trace Theory, a dual-process theory of false memory, as well as the assumptions regarding the impact of mood on information processing.