(A) Participants were presented with pictures of everyday objects for 2500 ms each separated by a 500 ms inter stimulus interval and asked to judge if the item was new (seen for the first time), old (a repeated item) or similar (resembled a previously shown item). The similar lure items served as the critical trials for assessing performance dependent on the dentate gyrus/CA3. (B) The entorhinal cortex (EC) provides input from the cortex, via layer II (EC2) neurons, to the dentate gyrus (DG) and distal dendrites of CA3 pyramidal neurons. The CA3 afferents, in addition to innervating CA1, have autoassociative collaterals, forming the majority of CA3 synaptic input. The EC2 neurons and their targets in the hippocampus comprise a system that rapidly encodes representations that are distinct from prior memories. The sparse connections onto granule cells in DG by EC afferents promote pattern separation, while the recurrent CA3 network promote pattern completion.