The hippocampal CA3 subregion is critical for rapidly encoding new memories, which suggests that neuronal computations are implemented in its circuitry that cannot be performed elsewhere in the hippocampus or in the neocortex. Recording studies show that CA3 cells are bound to a large degree to a spatial coordinate system, while CA1 cells can become more independent of a map-based mechanism and allow for a larger degree of arbitrary associations, also in the temporal domain. The mapping of CA3 onto a spatial coordinate system intuitively points to its role in spatial navigation but does not directly suggest how such a mechanism may support memory processing. Although bound to spatial coordinates, the CA3 network can rapidly alter its firing rate in response to novel sensory inputs and is thus not as strictly tied to spatial mapping as grid cells in the medial entorhinal cortex. Such rate coding within an otherwise stable spatial map can immediately incorporate new sensory inputs into the two-dimensional matrix of CA3, where they can be integrated with already stored information about each place. CA3 cell ensembles may thus support the fast acquisition of detailed memories by providing a locally continuous, but globally orthogonal representation, which can rapidly provide a new neuronal index when information is encountered for the first time. This information can be interpreted in CA1 and other downstream cortical areas in the context of less spatially restricted information.