The authors draw together the results of a series of detailed computational studies and show how they are contributing to the development of a theory of hippocampal function. A new part of the theory introduced here is a quantitative analysis of how backprojections from the hippocampus to the neocortex could lead to the recall of recent memories. The theory is then compared with other theories of hippocampal function. First, what is computed by the hippocampus is considered. The hypothesis the authors advocate, on the basis of the effects of damage to the hippocampus and neuronal activity recorded in it, is that it is involved in the formation of new memories by acting as an intermediate-term buffer store for information about episodes, particularly for spatial, but probably also for some nonspatial, information. The authors analyze how the hippocampus could perform this function, by producing a computational theory of how it operates, based on neuroanatomical and neurophysiological information about the different neuronal systems contained within the hippocampus. Key hypotheses are that the CA3 pyramidal cells operate as a single autoassociation network to store new episodic information as it arrives via a number of specialized preprocessing stages from many association areas of the cerebral cortex, and that the dentate granule cell/mossy fiber system is important, particularly during learning, to help to produce a new pattern of firing in the CA3 cells for each episode. The computational analysis shows how many memories could be stored in the hippocampus and how quickly the CA3 autoassociation system would operate during recall. The analysis is then extended to show how the CA3 system could be used to recall a whole episodic memory when only a fragment of it is presented. It is shown how this recall could operate using modified synapses in backprojection pathways from the hippocampus to the cerebral neocortex, resulting in reinstatement of neuronal activity in association areas of the cerebral neocortex similar to that present during the original episode. The recalled information in the cerebral neocortex could then be used by the neocortex in the formation of long-term memories.