We investigated the effect of environmental context on false recognition by using the remember/know procedure. Participants studied word lists, each of which was composed of associates of an unstudied word (critical lure) in one room. Then, they were randomly assigned to one of two conditions. One group moved into a new room (different environmental context) to take a recognition memory test, and the other group took the test in the same room (same environmental context). During the test, participants were asked to provide remember/know judgments about recognized items. A false recognition effect was observed such that the false alarm rate for critical lures was greater compared with distractors and was as high as the hit rate, resulting in no difference in overall discriminability between targets and critical lures. An effect of context-dependent recognition was found as both hit and false alarm rates increased in the same environmental context relative to the different environmental context, without a difference in overall discrimination between the context conditions. Nonetheless, participants used remember responses more often when discriminating targets (rather than critical lures) from distractors, whereas they used familiarity-based responses more often when discriminating critical lures (rather than targets) from distractors in the same environmental context. These results suggest that reinstating environment context plays an important role in false recognition increasing the sense of familiarity.