Schemas represent stable properties of individuals’ experiences, and allow them to classify new events as being congruent or incongruent with existing knowledge. Research with adults indicates that the prefrontal cortex (PFC) is involved in memory retrieval of schema‐related information. However, developmental differences between children and adults in the neural correlates of schema‐related memories are not well understood. One reason for this is the inherent confound between schema‐relevant experience and maturation, as both are related to time. To overcome this limitation, we used a novel paradigm that experimentally induces, and then probes for, task‐relevant knowledge during encoding of new information. Thirty‐one children aged 8–12 years and 26 young adults participated in the experiment. While successfully retrieving schema‐congruent events, children showed less medial PFC activity than adults. In addition, medial PFC activity during successful retrieval correlated positively with children's age. While successfully retrieving schema‐incongruent events, children showed stronger hippocampus (HC) activation as well as weaker connectivity between the striatum and the dorsolateral PFC than adults. These findings were corroborated by an exploratory full‐factorial analysis investigating age differences in the retrieval of schema‐congruent versus schema‐incongruent events, comparing the two conditions directly. Consistent with the findings of the separate analyses, two clusters, one in the medial PFC, one in the HC, were identified that exhibited a memory × congruency × age group interaction. In line with the two‐component model of episodic memory development, the present findings point to an age‐related shift from a more HC‐bound processing to an increasing recruitment of prefrontal brain regions in the retrieval of schema‐related events. Medial PFC activation for correctly > incorrectly retrieved schema‐congruent information was stronger (age difference in blue) in young adults (green) than in children (yellow), and correlated positively with children's age. However, hippocampus activation did not differ between the two age groups, suggesting an age‐related shift from hippocampus‐bound processing to an increasing recruitment of prefrontal regions.