In this article we develop the concept that the hippocampus and the midbrain dopaminergic neurons of the ventral tegmental area (VTA) form a functional loop. Activation of the loop begins when the hippocampus detects newly arrived information that is not already stored in its long-term memory. The resulting novelty signal is conveyed through the subiculum, accumbens, and ventral pallidum to the VTA where it contributes (along with salience and goal information) to the novelty-dependent firing of these cells. In the upward arm of the loop, dopamine (DA) is released within the hippocampus; this produces an enhancement of LTP and learning. These findings support a model whereby the hippocampal-VTA loop regulates the entry of information into long-term memory.