In adults, the contribution of the prefrontal cortex and hippocampus to memory encoding varies depending on the type of information being learned. Because these regions are still developing in children, their contribution to the formation of memories for different types of associations may differ from that of adults. Here, we examined how semantic and perceptual similarity between items affects memory behaviour and neural engagement in children (6-7 years) and adults. Participants completed a pair learning task during functional magnetic resonance imaging, in which pairs were perceptually or semantically related. Memory was tested outside the scanner with cued recall. Semantic similarity facilitated recall in both age groups, but more so in adults. Neurally, semantic pairs elicited broad frontoparietal activity while perceptual pairs engaged ventral visual and lateral prefrontal areas. Children showed more distinct neural responses to semantic versus perceptual pairs than adults, as well as more engagement in anterior hippocampus for semantic than perceptual pairs. These findings suggest that semantic similarity provides a powerful scaffold for memory across development, with age-related changes in memory encoding marked by a shift toward reliance on more integrated neural systems.