A previous block-design fMRI study revealed deactivation in the hippocampus in the transverse patterning task, specifically designed, on the basis of lesion literature, to engage hippocampal information processing. In the current study, a mixed block/event-related design was used to determine the temporal nature of the signal change leading to the seemingly paradoxical deactivation. All positive activations in the hippocampal-dependent condition, relative to a closely matched control task, were seen to result from positive BOLD transients in the typical 4–7 s poststimulus time range. However, most deactivations, including in the hippocampus and in other “default mode” regions commonly deactivated in cognitive tasks, were attributable to enhanced negative transient signals in a later time range, 10–12 s. This late hemodynamic transient was most pronounced in medial prefrontal cortex. In some regions, the hippocampal-dependent condition enhanced both the early positive and late negative transients to approximately the same degree, resulting in no significant signal change when block analysis is used, despite very different event-related responses. These results imply that delayed negative transients can play a role in determining the presence and sign of brain activation in block-design studies, in which case an event-related analysis can be more sensitive than a block analysis, even if the different conditions occur within blocks. In this case, default mode deactivations are timelocked to stimulus presentation as much as positive activations are, but in a later time range, suggesting a specific role of negative transient signals in task performance. Hum Brain Mapp, 2008. © 2007 Wiley-Liss, Inc.