Objects in our environment tend to be grouped in typical contexts. How does the human brain analyze such associations between visual objects and their specific context? We addressed this question in four functional neuroimaging experiments and revealed the cortical mechanisms that are uniquely activated when people recognize highly contextual objects (e.g., a traffic light). Our findings indicate that a region in the parahippocampal cortex and a region in the retrosplenial cortex together comprise a system that mediates both spatial and nonspatial contextual processing. Interestingly, each of these regions has been identified in the past with two functions: the processing of spatial information and episodic memory. Attributing contextual analysis to these two areas, instead, provides a framework for bridging between previous reports.