A physically active lifestyle has beneficial effects on hippocampal memory function. A potential mechanism for this effect is exercise-enhanced hippocampal plasticity, particularly in the dentate gyrus (DG). Within hippocampal memory formation, the DG plays a crucial role in pattern separation, which is the ability to discriminate among similar experiences. Computational models propose a theoretical hypothesis that enhanced DG-mediated pattern separation leads to "memory flexibility"-a selective improvement in the ability to overcome moderate levels of mnemonic interference. Thus, in the current cross-sectional study of healthy young adults, we tested the working hypothesis that aerobic fitness, as a physiological indicator of endurance capacity associated with physical activity, is strongly associated with mnemonic discrimination at moderate interference levels. When divided the sample (n = 75) based on a median split of aerobic fitness, the higher fitness group had better discrimination performance for moderate interference levels compared to the lower fitness group, namely, exhibited memory flexibility. Moreover, aerobic fitness levels were positively associated with discrimination performance for moderate interference levels, as a mediator of physical activity effects. This evidence suggests that aerobic fitness levels are associated with hippocampal DG-related memory, which is consistent with literature showing positive effect of physical exercise on hippocampal memory.