Functional magnetic resonance imaging was used to investigate the role of the hippocampus, amygdala and medial prefrontal cortex (mPFC) in a contextual conditioning and extinction paradigm provoking anxiety. Twenty-one healthy persons participated in a differential context conditioning procedure with two different background colours as contexts. During acquisition increased activity to the conditioned stimulus (CS+) relative to the CS− was found in the left hippocampus and anterior cingulate cortex (ACC). The amygdala, insula and inferior frontal cortex were differentially active during late acquisition. Extinction was accompanied by enhanced activation to CS+ vs. CS− in the dorsal anterior cingulate cortex (dACC). The results are in accordance with animal studies and provide evidence for the important role of the hippocampus in contextual learning in humans. Connectivity analyses revealed correlated activity between the left posterior hippocampus and dACC (BA32) during early acquisition and the dACC, left posterior hippocampus and right amygdala during extinction. These data are consistent with theoretical models that propose an inhibitory effect of the mPFC on the amygdala. The interaction of the mPFC with the hippocampus may reflect the context-specificity of extinction learning.