Recent functional imaging work supports the view that item and relational memory depend upon distinct encoding operations within the medial temporal lobe. Specifically, emerging findings demonstrate that the level of engagement of perirhinal cortex predicts later memory for individual items, whereas the level of hippocampal processing correlates with later relational memory, or recovery of additional episodic details. Furthermore, recent functional magnetic resonance imaging evidence in humans suggests that medial temporal lobe cortical input structures, the perirhinal and posterior parahippocampal cortices, differentially participate in the encoding of objects and their context, providing domain-specific input to the hippocampus. Taken together, these data help to construct a working model of how distinct medial temporal lobe structures participate in episodic memory formation with domain-general relational binding mechanisms supported by the hippocampus and provide emerging evidence for domain-specificity within the perirhinal and parahippocampal cortices.