Prior functional magnetic resonance imaging (fMRI) studies have found increased activity-related blood oxygen level-dependent (BOLD) signal in cognitively normal persons at genetic risk for Alzheimer's disease (AD). This has been interpreted as a compensatory response to incipient AD pathology. We studied the effects of fully penetrant familial Alzheimer's disease (FAD) mutations and apolipoprotein E (APOE) genotype on BOLD fMRI during a novelty encoding task in presymptomatic subjects. Twenty-three Mexican or Mexican-American persons at-risk for inheriting FAD mutations performed a block design novelty encoding task, and activation exhibited by FAD mutation carriers (MCs) was contrasted with that of noncarriers (NCs) and among APOE genotype groups. FAD MCs (n = 14) showed decreased BOLD activation in the anterior cingulate gyrus relative to 9 NCs. No increased activation was seen in MCs relative to NCs. Four APOE ε3/4 carriers demonstrated increased BOLD signal compared with 14 ε3/3 carriers in the occipital and perisylvian cortices bilaterally. There were no areas where ε3/3 carriers activated more than ε3/4 carriers. Our findings of increased fMRI activation associated with APOE genotype but not with FAD mutations suggest that APOE exerts an effect on the BOLD signal that is not readily explained as a compensatory phenomenon.