Activity in the hippocampus is modulated by novelty detection, and by the processing of conjunctions between two stimuli. We investigated whether the hippocampus is activated by discrimination of stimulus-stimulus relationships in novel versus familiar pairs of visual stimuli in 15 healthy subjects using functional magnetic resonance imaging. Subjects were asked to recognize the previously rewarded stimulus in each case. We found significantly greater activation of the right hippocampus when discriminating previously seen compared with novel pairs of visual stimuli. This activation was evident in individual subjects and was not related to stimulus novelty, reward contingency, or task instruction. Right hippocampal activation during discrimination of previously seen pairs of objects was correlated with activity in the anteromedial thalamus, cingulate cortex, and contralateral hippocampus.