With time and experience, memories undergo a process of reorganization that involves different neuronal networks, known as systems consolidation. The traditional view, as articulated in standard consolidation theory (SCT), is that (episodic and semantic) memories initially depend on the hippocampus, but eventually become consolidated in their original forms in other brain regions. In this study, we review the main principles of SCT and report evidence from the neuropsychological literature that would not be predicted by this theory. By comparison, the evidence supports an alternative account, the transformation hypothesis, whose central premise is that changes in neural representation in systems consolidation are accompanied by corresponding changes in the nature of the memory. According to this view, hippocampally dependent, episodic, or context-specific memories transform into semantic or gist-like versions that are represented in extra-hippocampal structures. To the extent that episodic memories are retained, they will continue to require the hippocampus, but the hippocampus is not needed for the retrieval of semantic memories. The transformation hypothesis emphasizes the dynamic nature of memory, as well as the underlying functional and neural interactions that must be taken into account in a comprehensive theory of memory.