Neuropsychological data in humans demonstrated a pivotal role of the medial temporal lobe, including the hippocampal formation (HF) and the parahippocampal gyrus (PH), in allocentric (environment-centered) spatial learning and memory. In the present study, the functional significance of the monkey HF and PH neurons in allocentric spatial processing was analyzed during performance of the spatial tasks. In the tasks, the monkey either freely moved to one of four reward areas in the experimental field by driving a cab that the monkey rode (real translocation task) or freely moved a pointer to one of four reward areas on the monitor (virtual translocation task) by manipulating a joystick. Of 389 neurons recorded from the monkey HF and PH, 166 had place fields that displayed increased activity in a specific area in the experimental field and/or on the monitor (location-differential neurons). More HF and PH neurons responded in the real translocation task. These neurons had low mean spontaneous firing rates (0.96 spikes/sec), similar to those of rodent HF place cells. The remaining nonresponsive neurons had significantly higher mean firing rates (8. 39 spikes/sec), similar to interneurons or theta cells in the rodent HF. Furthermore, most location-differential neurons showed different responses in different tasks. These results suggest that the HF and PH are crucial in allocentric information processing and, moreover, that the HF can encode different reference frames that are context or task-dependent. This may be the neural basis of episodic memory.