The val(66)met polymorphism on the BDNF gene has been reported to explain individual differences in hippocampal volume and memory-related activity. These findings, however, have not been replicated consistently and no studies to date controlled for the potentially confounding impact of early life stress, such as childhood abuse, and psychiatric status. Using structural and functional MRI, we therefore investigated in 126 depressed and/or anxious patients and 31 healthy control subjects the effects of val(66)met on hippocampal volume and encoding activity of neutral, positive and negative words, while taking into account childhood abuse and psychiatric status. Our results show slightly lower hippocampal volumes in carriers of a met allele (n=54) relative to val/val homozygotes (n=103) (P=0.02, effect size (Cohen's d)=0.37), which appeared to be independent of childhood abuse and psychiatric status. For hippocampal encoding activity, we found a val(66)met-word valence interaction (P=0.02) such that carriers of a met allele showed increased levels of activation in response to negative words relative to activation in the neutral word condition and relative to val/val homozygotes. This, however, was only evident in the absence of childhood abuse, as abused val/val homozygotes showed hippocampal encoding activity for negative words that was comparable to that of carriers of a met allele. Neither psychiatric status nor memory accuracy did account for these associations. In conclusion, BDNF val(66)met has a significant impact on hippocampal volume independently of childhood abuse and psychiatric status. Furthermore, early adverse experiences such as childhood abuse account for individual differences in hippocampal encoding activity of negative stimuli but this effect manifests differently as a function of val(66)met.