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Schemas allow us to make assumptions about the world based upon previous experiences and aid in memory organisation and retrieval. However, a reliance on schemas may also result in increased false memories to schematically related lures. Prior neuroimaging work has linked schematic processing in memory tasks to activity in prefrontal, visual, and temporal regions. Yet, it is unclear what type of processing in these regions underlies memory errors. The current study examined where schematic lures exhibit greater neural similarity to schematic targets, leading to this memory error, as compared to neural overlap with non-schematic lures, which, like schematic lures, are novel items at retrieval. Results showed that patterns of neural activity in ventromedial prefrontal cortex, medial frontal gyrus, middle temporal gyrus, hippocampus, and occipital cortices exhibited greater neural pattern similarity for schematic targets and schematic lures than between schematic lures and non-schematic lures. As such, results suggest that schematic membership, and not object history, may be more critical to the neural processes underlying memory retrieval in the context of a strong schema.