In contrast to early failures, recent functional brain imaging studies have shown that medial temporal lobe (MTL) structures are active during performance of a variety of tasks. These studies have revealed three properties of the MTL that are consistent with its critical role in establishing new declarative memories. First, the MTL is automatically engaged whenever an event is experienced, with the side of activation (left, right) dependent on the nature of the material presented (verbal, nonverbal). Second, the strength or amount of activity depends on how well the material is encoded. Deep encoding will produce more MTL activity than shallow encoding. Depth of encoding-related increases in activity are more commonly seen on the left, because deep encoding is nearly always synonymous with encoding for meaning, and, therefore, depends on left-lateralized language mechanisms. Third, the amount of MTL activity depends on novelty. Unfamiliar events and contexts will produce more MTL activity than familiar events and contexts. Novelty-related increases are more commonly seen on the right, perhaps reflecting the greater role of the right hemisphere in maintaining tonic attention and arousal. These findings suggest a hemispheric division of labor involving encoding for meaning (left) and novelty detection (right), both of which lead to better remembering. Hippocampus 1999;9:62–70. © 1999 Wiley-Liss, Inc.