The importance of the hippocampal formation of the brain for allocentric spatial mapping of the environment has been suggested by animal lesion and electrophysiological work. Here we describe a positron emission tomography (PET) study designed to investigate the regional cerebral blood flow changes associated with topographical memory formation in humans, i.e. the formation of representations of large-scale environments necessary for way-finding. Topographical learning of an urban environment from viewing of film footage depicting navigation was associated with activation of the right parahippocampal gyrus and hippocampus, with activation also of the left parahippocampal gyrus. In addition, there was activity in the precuneus. In contrast, the encoding of non-navigation episodic memory in a similar real-world context was not associated with activity in the hippocampal formation. Our results shed light on the neural basis of the human representation of large-scale space, pinpointing a particular role for the human hippocampal formation in learning to find one's way.