A cardinal feature of episodic memory is the ability to generalize knowledge across similar experiences to make inference about novel events. Here, we tested if this ability to apply generalized knowledge exists for experiences that are similar in terms of underlying concepts, prior knowledge, and if this comes at the expense of another feature of episodic memory: forming detailed recollection of events Over three experiments, healthy participants performed a modified version of the acquired equivalence test in which they learned overlapping object-scenes associations (A-X, B-X and A-Y) and then generalized the acquired knowledge to indirectly learned associations (B-Y) and novel objects (C-X and C-Y) that were from the same conceptual category (e.g. A - pencil; B - scissors) and different categories (e.g. A - watch; B - fork). In a subsequent recognition memory task, participants made old/new judgements to old (targets), similar (lures) and novel items. Across all experiments, we found that indirect associations that were rooted in conceptual similarity knowledge led to higher rates of generalisation but reduced detailed object memory. Our findings suggest that activating prior conceptual knowledge emphasizes the generalization function of episodic memory at the expense of detailed recollection. We discuss how this trade-off between generalization and recollection functions of episodic memory result from engaging different representations during learning.