Episodic memories contain various forms of contextual detail (e.g., perceptual, emotional, cognitive details) that need to become integrated. Each of these contextual features can be used to attribute a memory episode to its source, or origin of information. Memory for source information is one critical component in the formation of episodic memories. Likewise, the establishment of episodic memories also requires binding, which reflects the process of encoding the relations among stimuli and provides the experience that certain features of a memory episode belong together. The aims of the present review are to explore the roles of (1) cognitive and neural mechanisms involved in source memory and binding and how the development of these cognitive processes relates to episodic memory formation in childhood and (2) other higher-order cognitive processes, namely executive functioning, in early episodic memory development. We conclude by examining the challenges within this field of research, highlighting the role of other cognitive processes (e.g., sense of self, language, use of strategies) that may contribute to episodic memory formation, addressing areas that can be improved with additional research, and exploring directions for future work.