Model of latent inhibition. We have elaborated Bouton’s extinction model (Bouton, 1994) to conceptualize contextual retrieval in latent inhibition. We propose that a CS–no event association is acquired during CS preexposure and that this association is only retrieved in the presence of the contextual stimuli that were associated with preexposure. In other words, an “AND gate” is interposed between the CS and no-event representations, and this gate allows contextual retrieval cues to regulate the expression of the CS–no event association. The expression of the excitatory CS–US association, which is acquired during conditioning, is context independent. During extinction testing in the preexposure context, competition between the active CS–no event association and the CS–US association results in a suppression of the CS–US memory, favoring performance of the CS–no event memory. In this way, latent inhibition is only expressed in the context of preexposure. This allows for the expression of latent inhibition to be context specific. Our inactivation data suggest that the hippocampus allows context to regulate the expression of the CS–no event memory via the AND gate. In the absence of a functional hippocampus, contextual retrieval cues cannot regulate expression of the CS–no event memory. As a result, expression of the CS–no US memory becomes context independent, and conditional responding to the CS is limited in all test contexts.