In order to analyze the function of the hippocampus in learning, the activity of single neurons was recorded while monkeys learned a task of the type known to be impaired by damage to the hippocampus. In the conditional response task, the monkey had to learn to make one response when one stimulus was shown, and a different response when a different stimulus was shown. It had previously been shown that there are neurons in the hippocampal formation that respond in this task, to, for example, a combination of a particular visual stimulus that had been associated in previous learning with a particular behavioral response. In the present study, it was found that during such conditional response learning, the activity of 22% of the neurons in the hippocampus and parahippocampal gyrus with activity specifically related to the task altered their responses so that their activity, which was initially equal to the two new stimuli, became progressively differential to the two stimuli when the monkey learned to make different responses to the two stimuli. These changes occurred for different neurons just before, at, or just after the time when the monkey learned the correct response to make to the stimuli. In addition to these neurons, which had differential responses that were sustained for as long as the recordings continued, another population of neurons (45% of those with activity specifically related to the task) developed differential activity to the two new stimuli, yet showed such differential responses transiently for only a small number of trials at about the time when the monkey learned. These findings are consistent with the hypothesis that some synapses on hippocampal neurons modify during this type of learning so that some neurons come to respond to particular stimulus-response associations that are being learned. Further, the finding that many hippocampal neurons started to reflect the new learning, but then stopped responding differentially (the transient neurons), is consistent with the hypothesis that the hippocampal neurons with large sustained changes in their activity inhibited the transient neurons, which then underwent reverse learning, thus providing a competitive mechanism by which not all neurons are allocated to any one learned association or event.