Reality monitoring is defined as the ability to distinguish internally self-generated information from externally-derived information. The medial prefrontal cortex (mPFC) is a key brain region subserving reality monitoring and has been shown to be activated specifically during the retrieval of self-generated information. However, it is unclear if mPFC is activated during the encoding of self-generated information into memory. If so, it is important to understand whether successful retrieval of self-generated information critically depends on enhanced neural activity within mPFC during initial encoding of this self-generated information. We used magnetoencephalographic imaging (MEGI) to determine the timing and location of cortical activity during a reality-monitoring task involving self generated contextual source memory encoding and retrieval. We found both during encoding and retrieval of self-generated information, when compared to externally-derived information, mPFC showed significant task induced oscillatory power modulation in the beta-band. During initial encoding of self-generated information, greater mPFC beta-band power reductions occurred within a time window of -700 ms to -500 ms prior to vocalization. This increased activity in mPFC was not observed during encoding of externally-derived information. Additionally, increased mPFC activity during encoding of self-generated information predicted subsequent retrieval accuracy of this self-generated information. Beta-band activity in mPFC was also observed during the initial retrieval of self-generated information within a time window of 300 to 500 ms following stimulus onset and correlated with accurate retrieval performance of self-generated information. Together, these results further highlight the importance of mPFC in mediating the initial generation and awareness of participants' internal thoughts.