Patients with early Alzheimer's disease (AD) have difficulty in learning new information and in detecting novel stimuli. The underlying physiological mechanisms are not well known. We investigated the electrophysiological correlates of the early (< 400 ms), automatic phase of novelty detection and encoding in AD. We used high-density EEG Queryin patients with early AD and healthy age-matched controls who performed a continuous recognition task (CRT) involving new stimuli (New), thought to provoke novelty detection and encoding, which were then repeated up to 4 consecutive times to produce over-familiarity with the stimuli. Stimuli then reappeared after 9-15 intervening items (N-back) to be re-encoded. AD patients had substantial difficulty in detecting novel stimuli and recognizing repeated ones. Main evoked potential differences between repeated and new stimuli emerged at 180-260 ms: neural source estimations in controls revealed more extended MTL activation for N-back stimuli and anterior temporal lobe activations for New stimuli compared to highly familiar repetitions. In contrast, AD patients exhibited no activation differences between the three stimulus types. In direct comparison, healthy subjects had significantly stronger MTL activation in response to New and N-back stimuli than AD patients. These results point to abnormally weak early MTL activity as a correlate of deficient novelty detection and encoding in early AD.