Recent theories have posited that the hippocampus and thalamus serve distinct, yet related, roles in episodic memory. Whereas the hippocampus has been implicated in long-term memory encoding and storage, the thalamus, as a whole, has been implicated in the selection of items for subsequent encoding and the use of retrieval strategies. However, dissociating the memory impairment that occurs following thalamic injury as distinguished from that following hippocampal injury has proven difficult. This study examined relationships between MRI volumetric measures of the hippocampus and thalamus and their contributions to prose and rote verbal memory functioning in 18 patients with intractable temporal lobe epilepsy (TLE). Results revealed that bilateral hippocampal and thalamic volume independently predicted delayed prose verbal memory functioning. However, bilateral hippocampal, but not thalamic, volume predicted delayed rote verbal memory functioning. Follow-up analyses indicated that bilateral thalamic volume independently predicted immediate prose, but not immediate rote, verbal recall, whereas bilateral hippocampal volume was not associated with any of these immediate memory measures. These findings underscore the cognitive significance of thalamic atrophy in chronic TLE, demonstrating that hippocampal and thalamic volume make quantitatively, and perhaps qualitatively, distinct contributions to episodic memory functioning in TLE patients. They are also consistent with theories proposing that the hippocampus supports long-term memory encoding and storage, whereas the thalamus is implicated in the executive aspects of episodic memory. (Contains 3 figures and 3 tables.)