Although it has recently been demonstrated that source monitoring (SM) processes may mediate the relationship between working memory (WM) and false memories, little research has investigated whether the quality of monitoring processes can account for this reduction. In the current study, participants performed multiple false memory, WM, and SM tasks. Consistent with previous research, SM abilities mediated the relationship between WM and false memories (regardless of whether or not participants were warned of the illusions at encoding). High SM individuals were better able to recall contextual information from study to correctly reject lures, whereas low SM individuals were more likely to rely on the quality of retrieved details to reject lures. These results suggest that individuals low and high in SM abilities rely on qualitatively different monitoring processes to reduce errors, and that individual differences in diagnostic monitoring strategies may account for previous relationships found between WM and false memories.