Spatially unitized associations occupy an intermediate position along the item-to-association continuum in older adults.

Older adults show disproportionate impairments in associative memory relative to memory for individual items. Unitization, the process by which discrete elements are encoded as a single integrated representation, has been proposed to mitigate this deficit by reducing reliance on hippocampal binding and shifting processing toward perirhinal cortex-mediated item-based encoding. However, most prior work has not included a single item baseline, leaving unclear whether unitized associations are truly processed like items. Here, we investigated whether spatial proximity supports associative memory in older adults and how this benefit is reflected in medial temporal lobe (MTL) encoding activity. Participants encoded unrelated object pairs presented either proximally (spatially integrated) or distally (spatially separated), alongside a single item condition. Behaviorally, older adults showed better memory for proximal than distal pairs, though performance remained below that of single items. Neurally, MTL activity scaled with associative demand, with hippocampal activity increasing and perirhinal activity decreasing as demand increased. Results further revealed an anterior-posterior MTL dissociation, with proximal pairs sharing neural properties with both single items and distal pairs without uniquely recruiting either. Furthermore, hippocampal patterns reliably distinguished item from associative encoding, and the parahippocampal cortex discriminated all three conditions, indicating that the item-associative structure of the MTL was preserved in aging. Together, these findings suggest that proximal pairs occupy an intermediate position between item and associative representations within an intact MTL architecture, and that spatial proximity benefits associative memory in older adults by partially, but not fully, shifting associative demands toward item-based processing.