Recent studies using transgenic mice lacking NMDA receptors in the hippocampus challenge the long-standing hypothesis that hippocampal long-term potentiation-like mechanisms underlie the encoding and storage of associative long-term spatial memories. However, it may not be the synaptic plasticity-dependent memory hypothesis that is wrong; instead, it may be the role of the hippocampus that needs to be re-examined. We present an account of hippocampal function that explains its role in both memory and anxiety.