How does RAG reduce hallucinations in language models?

RAG reduces hallucinations by giving the model concrete source text to ground its answer in, rather than forcing it to generate from parametric memory alone. When the prompt includes retrieved passages and instructs the model to answer only from that context, the model is far less likely to invent facts. Hallucinations still occur when retrieved documents are irrelevant, contradictory, or missing the answer entirely, so retrieval quality directly determines hallucination rate. Adding rerankers, hybrid search, and faithfulness evaluation further reduces this risk.