Occurs due to insufficient cues. When info is stored, associated cues are stored simultaneously. Retrieval failure occurs if cues aren't present at recall.
Godden and Baddeley studied deep-sea divers who learned a list of words underwater or on land and were then asked to recall either on land or underwater. When the contexts were different accurate recall was 40% lower.
Carter and Cassaday gave antihistamine drugs to patients, creating a different internal physiological state. Patients had to learn lists of words and passages of prose and then recall the info. In mismatched conditions (learning on/off drug, recall on/off drug), performance was significantly worse.