Recognition memory based on familiarity judgments is a form of declarative memory that has been repeatedly associated with the anterior medial temporal lobe. It has been argued that this region sustains familiarity-based recognition not only by retrieving item-specific information but also by coding for those semantic aspects of an event that support later familiarity-based recognition. Here, we used event-related fMRI to directly examine whether the contribution of anterior medial temporal lobe to declarative memory indeed results from its role in processing semantic aspects of an event. For this purpose, a sentence comprehension task was employed which varied the demands of semantic and syntactic processing of the sentence-final word. By presenting those sentence-final words together with new words in a subsequent incidental recognition memory test, we were able to determine the mnemonic consequences of presenting words in different sentential contexts. Results showed that enhanced semantic processing during comprehension activates regions in medial temporal lobe cortex and leads to response suppression in partly overlapping regions when the word is successfully retrieved. Data from a behavioral follow-up study support the view that enhanced semantic processing at study enhances familiarity-based remembering in a subsequent test phase.