The present study focused on the processes underlying cognitive association formation by investigating subsequent memory effects. Event-related potentials were recorded as participants studied pairs of words, presented one word at a time, for later recall. The findings showed that a frontal-positive late wave (LW), which occurred 1-1.6 s after the presentation of the second word of a pair during study, was associated with later paired associate recall. The observed LW likely reflected cognitive association formation processing. Paired associate recall was also associated with a larger P555 to each word of a pair, likely reflecting the encoding of each individual word of a pair, which necessarily precedes association formation between the two words. Moreover a larger N425 was elicited by pairs that were encoded in a low context-similarity condition compared to that of a high context-similarity condition, likely reflecting semantic integration. Minimum norm source analyses showed that the likely sources of these ERP effects changed dynamically in time: a widespread fronto-temporo-parietal activation during the N425 was followed by a fronto-temporal activation during the P555, and finally by a left prefrontal activation during the LW. (Contains 10 figures.)