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The hippocampus is a small organ located within the brain's medial temporal lobe and forms an important part of the limbic system, the region that regulates emotions. The hippocampus is associated mainly with memory, in particular long-term memory. The organ also plays an important role in spatial navigation.
Damage to the hippocampus can lead to loss of memory and difficulty in establishing new memories. In Alzheimer's disease, the hippocampus is one of the first regions of the brain to be affected, leading to the confusion and loss of memory so commonly seen in the early stages of the disease.

The major functions of the hippocampus include:
Memory
Historically, the link between the hippocampus and long-term memory formation was first described by William Scoville and Brenda Milner who reported what happened to an epileptic individual who underwent surgery on the organ that was intended to relieve his seizures.
The patient had severe amnesia after the procedure as well as an inability to form new memories of events such as when or where a situation occurred (termed episodic memory). The only memories he did retain were those from many years earlier, as far back as childhood.

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Experts generally agree that the hippocampus plays a role in the formation of new memories and in the detection of new surroundings, occurrences and stimuli. Some also believe the organ is involved in declarative memory; that is memories that can be stated verbally such as facts and figures. However, studies have shown that damage to the hippocampus does not affect a person's ability to learn a new skill such as playing a musical instrument or solving certain types of puzzles which suggests that the memories involved in learning a procedure are governed by brain areas other than the hippocampus.

Spatial navigation and spatial memory
Neuroscientist John O' Keefe and psychology professor Lynn Nadel studied the involvement of the hippocampus in memory formation and learning behaviors in the 1960's and 1970's. Together, they wrote the landmark 1978 book "The Hippocampus as a Cognitive map," which outlines the role of the hippocampus in learning and storing information referring to portions of space, in the form of cognitive maps.

Behavioral inhibition
Animal experiments investigating the effects of hippocampal damage have previously suggested that, firstly, the damage causes hyperactivity and, secondly, that it affects the ability to inhibit responses that have previously been learnt.

Reviewed by Sally Robertson, BSc
Sources
http://www.caam.rice.edu/~cox/wrap/hippocampus.pdf
http://www.cognitivemap.net/
http://www.icn.ucl.ac.uk/nburgess/papers/Kingetal04.pdf
http://www.uv.es/revispsi/articulos1.02/M6Good.pdf
http://www.richardhill.com.au/HippocampusMemory.pdf