Abstract
Recent studies on the hippocampus and the prefrontal cortex have considerably advanced our understanding of the distinct roles of these brain areas in the encoding and retrieval of memories, and of how they interact in the prolonged process by which new memories are consolidated into our permanent storehouse of knowledge. These studies have led to a new model of how the hippocampus forms and replays memories and how the prefrontal cortex engages representations of the meaningful contexts in which related memories occur, as well as how these areas interact during memory retrieval. Furthermore, they have provided new insights into how interactions between the hippocampus and prefrontal cortex support the assimilation of new memories into pre-existing networks of knowledge, called schemas, and how schemas are modified in this process as the foundation of memory consolidation.