The functional deficits associated with hippocampal sclerosis during declarative memory formation are largely unknown. In this study, we analyzed intracranial event-related potentials recorded from the medial temporal lobes of nine epilepsy patients performing a word memorization task. We used frequency-specific wavelet analysis to assess stimulus-related changes in power and intertrial phase coherence. Statistical analysis revealed a significant decrease of stimulus-induced power in the delta and theta range on the side of pathology. No significant differences in phase locking were observed. Findings indicate a reduced availability of recruitable neural assemblies not only in the hippocampus but also in the rhinal cortex during memory formation. Network functions related to the timing of neural responses to the stimulus appear to be preserved.