A fundamental challenge in the study of learning and memory is to understand the role of existing knowledge in the encoding and retrieval of new episodic information. The importance of prior knowledge in memory is demonstrated in the congruency effect - the robust finding wherein participants display better memory for items that are compatible, rather than incompatible, with their pre-existing semantic knowledge. Despite its robustness, the mechanism underlying this effect is not well understood. In four studies, we provide evidence that demonstrates the privileged explanatory power of the elaboration-integration account over alternative hypotheses. Furthermore, we question the implicit assumption that the congruency effect pertains to the truthfulness/sensibility of a subject-predicate proposition, and show that congruency is a function of semantic relatedness between item and context words.