We readily remember events and situations in our daily lives and rapidly acquire memories of specific events by watching a telecast, or participating in a dialogue. There is a broad consensus that the hippocampal system (HS), consisting of the hippocampal formation and neighboring cortical areas plays a critical role in the encoding and retrieval of such ``episodic'' memories. But how the HS subserves this mnemonic function is not well understood.

I will describe a circuit-level computational model (SMRITI*) that demonstrates how a cortically expressed pattern of activity representing an episode can be transformed rapidly into a robust memory trace within neural structures whose architecture and circuitry are analogous to those of the HS. During retrieval, this episodic memory trace acting in concert withcortical circuits encoding semantic knowledge and sensorimotor schemas can recreate an activity-based representation of the memorized event.

The model explicates the functional requirements of encoding and retrieving memories of events and situations and suggests that there is a remarkable match between the idiosyncratic architecture and local circuitry of the HS and these functional requirements.

The model suggests that the HS plays a central role in the acquisition as well as in the long-term maintenance of episodic memories. It identifies constraints on the cortical representation of relational knowledge, helps delineate the semantic and episodic memory distinction, offers biologically grounded explanations for behavioral findings such as the fan effect, and predicts memory deficits that would result from insult to specific HS subregions and cortical circuits projecting to the HS.