How do we decide if the people we meet and the things we see are familiar or new? If something is new, we need to encode it as a memory distinct from already stored episodes, using a process known as pattern separation. If familiar, it can be used to reactivate a previously stored memory, by a process known as pattern completion. To orchestrate these conflicting processes, current models propose that the episodic memory system uses environmental cues to establish processing biases that favor either pattern separation during encoding or pattern completion during retrieval. To assess this theory, we measured how people's memory formation and decisions are influenced by their recent engagement in episodic encoding and retrieval. We found that the recent encoding of novel objects improved subsequent identification of subtle changes, a task thought to rely on pattern separation. Conversely, recent retrieval of old objects increased the subsequent integration of stored information into new memories, a process thought to rely on pattern completion. These experiments provide behavioral evidence that episodic encoding and retrieval evoke lingering biases that influence subsequent mnemonic processing.