The medial temporal lobe (MTL) plays a crucial role in supporting memory for events, but the functional organization of regions in the MTL remains controversial, especially regarding the extent to which different subregions support recognition based on familiarity or recollection. Here we review results from functional neuroimaging studies showing that, whereas activity in the hippocampus and posterior parahippocampal gyrus is disproportionately associated with recollection, activity in the anterior parahippocampal gyrus is disproportionately associated with familiarity. The results are consistent with the idea that the parahippocampal cortex (located in the posterior parahippocampal gyrus) supports recollection by encoding and retrieving contextual information, whereas the hippocampus supports recollection by associating item and context information. By contrast, perirhinal cortex (located in the anterior parahippocampal gyrus) supports familiarity by encoding and retrieving specific item information. We discuss the implications of a 'binding of item and context' (BIC) model for studies of recognition memory. This model argues that there is no simple mapping between MTL regions and recollection and familiarity, but rather that the involvement of MTL regions in these processes depends on the specific demands of the task and the type of information involved. We highlight several predictions for future imaging studies that follow from the BIC model.