The generation effect, in which self-generated verbal material is better remembered than material that is merely read, was studied in two groups differing in knowledge of a particular domain (traffic regulations). In two experiments, correct and incorrect sentences of domain-related information were presented and each high-knowledge (HK) and low-knowledge (LK) individuals were either to read these sentences or to generate them. In the read condition, subjects were asked to read each sentence aloud. In the generate condition, they saw a randomly ordered list of the content clauses of each sentence and used these clauses to reconstruct a meaningful sentence. For incidental recognition, the generation effect emerged for HK but not for LK individuals. For both incidental and intentional cued recall, the generation effect was obtained for both HK and LK individuals irrespective of the type of sentence. The results suggested that generation effect was dependent on both the nature of subjects and the measures of memory.