The entorhinal cortex provides the primary cortical projections to the hippocampus, a brain structure critical for memory. However, it remains unclear how the precise firing patterns of medial entorhinal cortex (MEC) cells influence hippocampal physiology and hippocampus-dependent behavior. We found that complete bilateral lesions of the MEC resulted in a lower proportion of active hippocampal cells. The remaining active cells had place fields, but with decreased spatial precision and decreased long-term spatial stability. In addition, MEC rats were as impaired in the water maze as hippocampus rats, while rats with combined MEC and hippocampal lesions had an even greater deficit. However, MEC rats were not impaired on other hippocampus-dependent tasks, including those in which an object location or context was remembered. Thus, the MEC is not necessary for all types of spatial coding or for all types of hippocampus-dependent memory, but it is necessary for the normal acquisition of place memory.