In spite of the acknowledged role that the thalamus plays in declarative memory, details about the precise memory processes it is involved in and which are the structures of the thalamus that contribute to these processes remain unknown. An overview is presented of human clinical and animal experimental findings showing the involvement of the thalamus, at the level of white matter tracts and separate nuclei, in aspects of memory functioning. The region in the thalamus that contributes to declarative memory is the anterior and medial division, containing the anterior nuclei, the medial dorsal nucleus and the intralaminar and midline nuclei. A lesion to the anterior nuclei or their afferent white matter tract, the mammillothalamic tract, results in deficits of encoding of new stimuli. Lesions to the medial dorsal nucleus affect executive processes pertaining to declarative memory, such as the use of memory strategies for retrieval; damage to the intralaminar and midline nuclei results in decreased arousal and thus affects the declarative memory process. Based on anatomical and functional data, a theory is proposed of how the thalamus might play a role at different levels of declarative memory functioning. Firstly, the anterior and mediodorsal nucleus are involved in processing the contents of the stimuli for storage and recall. The anterior nuclei influence the selection of material to be stored and remembered, whereas the mediodorsal nucleus is involved in the coordination and selection of the strategies used to retrieve material. Secondly, the intralaminar and midline nuclei and specifically the lateral and ventral components, maintain a necessary state of the cortical regions involved in the ongoing memory processes. The two types of function subserved by these groups of thalamic nuclei, focussing on contents vs. state, need to work in parallel to mediate and allow memory functioning, respectively.