Many aspects of the complex relationship between working memory (WM) and long-term memory (LTM) remain unclear. Here, we manipulated task demands on a brief delayed-recognition paradigm to reveal behavioral and neural dissociations between these systems. Variations from a Baseline task included 3 challenges: increased delay duration, distraction during maintenance, and more closely matched memory probes, which were presented in behavioral experiments and during functional magnetic resonance imaging. Each of the challenges resulted in a significant decline in WM accuracy, and interestingly, a concurrent improvement in incidental LTM. Neural data revealed that, in task blocks, when participants anticipated, and then experienced, increased demands, they engaged medial temporal lobe (MTL) regions more during both the encoding and delay periods. Overall, these results indicate that distinct memory systems are recruited based on anticipated demands of a memory task, and MTL involvement underlies the observed dissociation between WM and LTM performance.