This dissertation includes three studies designed to further our understanding of the mechanism of analogical reasoning. Analogical reasoning refers to the process of judging the similarity between relational representations and has been hypothesized to require two key component processes, relational integration and interference resolution. In Study 1, healthy young adults' analogical reasoning performance deteriorated when cognitive demands on relational integration and interference resolution increased independently. When demands on both component processes increased simultaneously, an over-additive decline in performance was observed. However, the impact of interference on reasoning performance was only caused by information that had been attended to and maintained in working memory. Study 1 demonstrates that relational integration shares limited-capacity executive resources with resolution of interference by active suppressing within working memory but not by passive ignoring at encoding. Study 2 identified the neural substrates of relational integration, interference resolution and the interaction between the two component processes of analogical reasoning with event-related functional magnetic resonance imaging (fMRI). Increase in demand on relational integration was associated with increased activation in prefrontal regions including bilateral frontal pole, middle and inferior frontal gyri. When there was a need to resolve interference during reasoning, activation increased in bilateral middle and inferior frontal gyri but not in the frontal pole in either hemisphere. Prefrontal regions associated with each component process of analogical reasoning partially overlapped in bilateral middle and inferior frontal gyri. These results indicate that analogical reasoning is mediated by the coordination of multiple regions of the prefrontal cortex, some of which are sensitive only to demands on one of these two component processes of analogical reasoning, whereas others are sensitive to both. Study 3 examined the neural correlates of interference resolution during verbal analogical reasoning in relation to individual differences in fluid intelligence using event-related fMRI. Neural regions including prefrontal, anterior cingulate, visual cortices and subcortical structures showed increases in activation in a magnitude positively correlated with intelligence when trials requiring resolution of interference were contrasted with those that did not impose this additional cognitive load. These results support the hypothesis that superior intelligence may be characterized by flexible recruitment of a distributed network for cognitive control.