The aim of this study was to explore the mechanism of the age-related P3 ‘anterior’ shift using high-precision temporal principal components analysis (tPCA). Continuous EEG was recorded from younger and older adults while completing a two-stimulus visual oddball task. We narrowed our tPCA input to the P3 range to enhance precision and reveal potentially overlapping temporal components. eLORETA was used to model group and condition-related differences in component sources to further understanding of the functional relevance and neurobiology of the P3 anterior shift. The target P3a and P3b and the nontarget P3/l-P3 (late P3) evidenced the expected anterior shift. There was a general reduction in P3 component amplitudes in older compared to younger adults across both stimulus types, consistent with the P3 ‘ageing effect’. For all P3 components, eLORETA modelled changes in activation of multiple and diffuse sources with age, suggesting that neural processing is extending beyond frontal regions and that crosstalk between different neural networks is likely. Findings are aligned with the dedifferentiation hypothesis, as reduced P3 target amplitudes reflect attenuated responding to a preferred stimulus, and the anterior shift to nontargets is a form of neural broadening, or decreased selectivity of processing and increased responding to a non-preferred stimulus.