Recent studies indicated that the human medial temporal lobe (MTL) may not only be important for long-term memory consolidation but also for certain forms of short-term memory. In this study, we explored the interplay between short- and long-term memory using high-density event-related potentials. We found that pictures immediately repeated after an unfilled interval were better recognized than pictures repeated after intervening items. After 30 min, however, the immediately repeated pictures were significantly less well recognized than pictures repeated after intervening items. This processing advantage at immediate repetition but disadvantage for long-term storage had an electrophysiological correlate: spatiotemporal analysis showed that immediate repetition induced a strikingly different electrocortical response after 200–300 ms, with inversed polarity, than new stimuli and delayed repetitions. Inverse solutions indicated that this difference reflected transient activity in the MTL. The findings demonstrate behavioral and electrophysiological dissociation between recognition during active maintenance and recognition after intervening items. Processing of novel information seems to immediately initiate a consolidation process, which remains vulnerable during active maintenance and increases its effectiveness during off-line processing. © 2008 Wiley-Liss, Inc.