Mnemonic representations allow humans to re-experience the past or simulate future scenarios by integrating episodic features from memory. Theoretical models posit that mnemonic representations require dynamic processing between neural indexes in the hippocampus and areas of the cortex providing specialized information processing. However, it remains unknown whether global and local network topology varies as information is encoded into a mnemonic representation and subsequently reinstated. Here, we investigated the dynamic nature of memory networks while a representation of a virtual city is generated and reinstated during mental simulations. We find that the brain reconfigures from a state of heightened integration when encoding demands are highest, to a state of localized processing once representations are formed. This reconfiguration is associated with changes in hippocampal centrality at the intra- and inter-module level, decreasing its role as a connector hub between modules and within a hippocampal neighborhood as encoding demands lessen. During mental simulations, we found increased levels of hippocampal centrality within its local neighborhood coupled with decreased functional interactions between other regions of the neighborhood during highly vivid simulations, suggesting that information flow vis-à-vis the hippocampus is critical for high fidelity recapitulation of mnemonic representations.