Episodic memories have been suggested to be represented by neuronal sequences, which are stored and retrieved from the hippocampal circuit. A special difficulty is that realistic neuronal sequences are strongly correlated with each other since computational memory models generally perform poorly when correlated patterns are stored. Here, we study in a computational model under which conditions the hippocampal circuit can perform this function robustly. During memory encoding, CA3 sequences in our model are driven by intrinsic dynamics, entorhinal inputs, or a combination of both. These CA3 sequences are hetero-associated with the input sequences, so that the network can retrieve entire sequences based on a single cue pattern. We find that overall memory performance depends on two factors: the robustness of sequence retrieval from CA3 and the circuit's ability to perform pattern completion through the feedforward connectivity, including CA3, CA1 and EC. The two factors, in turn, depend on the relative contribution of the external inputs and recurrent drive on CA3 activity. In conclusion, memory performance in our network model critically depends on the network architecture and dynamics in CA3.