Pattern separation (PS) describes the process by which the brain discriminates similar stimuli from previously encoded stimuli. This fundamental process requires the intact processing by specific subfields in the hippocampus and can be examined using mnemonic discrimination tasks. Previous studies reported different patterns for younger and older individuals between mnemonic discrimination performance and hippocampal subfield activation. Here, we investigated the relationship between the lure discrimination index (LDI) and hippocampal subfield volume and activity across the adult lifespan (20-70 years old). Using ultra-high field functional and structural magnetic resonance imaging at 7 T, we found that lower DG volume and higher CA3 activation was associated with worse LDI performance in individuals (>60 years), suggesting that this higher activation may be an indication of aberrant neurodegenerative-related processes. In fact, higher activation in the CA1 and DG was associated with lower volumes in these subfields. For individuals around 40-50 years old, we observed that greater left and right DG volume, and greater activity in the CA3 was associated with lower LDI performance. Taken together, these results suggest that the relationship between memory and hippocampal subfield structure or function varies nonlinearly and possibly reciprocally with age, with midlife being a critically vulnerable period in life.