Recent functional neuroimaging evidence suggests a bottleneck between learning new information and remembering old information. In two behavioral experiments and one functional MRI (fMRI) experiment, we tested the hypothesis that learning and remembering compete when both processes happen within a brief period of time. In the first behavioral experiment, participants intentionally remembered old words displayed in the foreground, while incidentally learning new scenes displayed in the background. In line with a memory competition, we found that remembering old information was associated with impaired learning of new information. We replicated this finding in a subsequent fMRI experiment, which showed that this behavioral effect was coupled with a suppression of learning-related activity in visual and medial temporal areas. Moreover, the fMRI experiment provided evidence that left mid-ventrolateral prefrontal cortex is involved in resolving the memory competition, possibly by facilitating rapid switching between learning and remembering. Critically, a follow-up behavioral experiment in which the background scenes were replaced with a visual target detection task provided indications that the competition between learning and remembering was not merely due to attention. This study not only provides novel insight into our capacity to learn and remember, but also clarifies the neural mechanisms underlying flexible behavior.