In this study, we were interested in examining how the reduction of attentional resources during the encoding of word lists and the type of recall test affected true and false memories in the Deese-Roediger-McDermott paradigm (DRM paradigm). Three DRM lists were presented visually under full attention conditions or while participants had to monitor a concurrent auditory task of letters and digits. After the presentation of each list, participants completed a free recall test or a cued recall test. Divided attention had an opposite effect on correct recall of studied words and false recall of critical words. Thus, the concurrent task caused a reduction in correct recall, but increased false recall. The retrieval cue did not affect the correct recall of studied words, but it was helpful in reducing the false recall of critical words and other intrusions. The results are discussed taking into account the theoretical proposals of the activation monitoring account and fuzzy trace theory.