Raloxifene is a selective estrogen receptor modulator (SERM) that is prescribed in females only, but its use in male subjects is increasingly considered. With a growing number of patients having potential benefit from raloxifene, the need for an assessment of its effects on brain function is growing. Effects of estrogens on brain function are very subtle and difficult to detect by neuropsychological assessment. Functional imaging techniques, however, have been relatively successful in detecting such changes. This study used functional magnetic resonance imaging (fMRI) to examine effects of raloxifene treatment on memory function. Healthy elderly males (n = 28; mean age 63.6 years, SD 2.4) were scanned during performance on a face encoding paradigm. Scans were made at baseline and after 3 months of treatment with either raloxifene (n = 14) or placebo (n = 14). Treatment effects were analyzed using mixed-effects statistical analysis (FSL). Activation during task performance involved bilateral parietal and prefrontal areas, anterior cingulate gyrus, and inferior prefrontal, occipital, and mediotemporal areas bilaterally. When compared to placebo, raloxifene treatment significantly enhanced activation in these structures (Z > 3.1), except for mediotemporal areas. Task performance accuracy diminished in the placebo group (P = 0.02), but remained constant in the raloxifene group (P = 0.60). In conclusion, raloxifene treatment enhanced brain activation in areas spanning a number of different cognitive domains, suggesting an effect on cortical arousal. Such effects may translate into small effects on behavior, including effects on attention and working memory performance, executive functions, verbal skills, and episodic memory. Further neuropsychological assessment is necessary to test the validity of these predictions.