Previous studies demonstrated that patients producing spontaneous confabulations fail to suppress currently irrelevant memory traces and have anterior limbic lesions, particularly involving the orbitofrontal cortex or the basal forebrain. Here, a woman is described who had sarcoidosis damaging the medial hypothalamus and endocrine dysfunction, and a severe memory failure characterized by spontaneous confabulation, disorientation, and severely impaired free recall with preserved recognition. Isolated hypothalamic damage may produce the same type of memory disorder as orbitofrontal damage.