Eighteen- to twenty-five-year-olds show the highest rates of alcohol use disorders (AUD) and heavy drinking, which may have critical neurocognitive implications. Regions subserving memory may be particularly susceptible to alcohol-related impairments. We used blood oxygen level-dependent (BOLD) functional magnetic resonance imaging (fMRI) to examine the neural correlates of visual encoding and recognition among heavy-drinking college students. We predicted that heavy drinkers would show worse memory performance, increased frontal/parietal activation, and decreased hippocampal response during encoding. Participants were 23 heavy drinkers and 33 demographically matched light drinkers, aged 18–20, characterized using quantity/frequency of drinking and AUD diagnosis. Participants performed a figural encoding and recognition task during fMRI. BOLD response during encoding was modeled based on whether each stimulus was subsequently recognized or forgotten (i.e., correct vs. incorrect encoding). There were no group differences in behavioral performance. Compared to light drinkers, heavy drinkers showed (1) greater BOLD response during correct encoding in the right hippocampus/medial temporal, right dorsolateral prefrontal, left inferior frontal, and bilateral posterior parietal cortices; (2) less left inferior frontal activation and greater bilateral precuneus deactivation during incorrect encoding; and (3) less bilateral insula response during correct recognition (clusters >10,233 μl, p < 0.05 whole brain). This is the first investigation of the neural substrates of figural memory among heavy-drinking older adolescents. Heavy drinkers demonstrated compensatory hyperactivation of memory-related areas during correct encoding, greater deactivation of default mode regions during incorrect encoding, and reduced recognition-related response. Results could suggest use of different encoding and recognition strategies among heavy drinkers.