Mammillary body atrophy is present in a number of neurological conditions and recent clinical findings highlight the importance of these nuclei for memory. While most accounts of diencephalic amnesia emphasize the functional importance of the hippocampal projections to the mammillary bodies, the present study tested the importance of the other major input to the mammillary bodies, the projections from the ventral tegmental nucleus of Gudden (VTNg). Although the VTNg, and its projections to the mammillary bodies, is present across species, the size and location of this structure has made it an extremely difficult structure to assess in primates. The effects of selective, neurotoxic lesions of the VTNg were, therefore, assessed in rats. The animals with these lesions were impaired on a series of spatial learning tasks, namely delayed-matching-to-place in the water maze, T-maze alternation and working memory in the radial arm maze. Normal performance on these tasks is dependent on those brain structures (e.g. hippocampus and mammillary bodies) that are now assumed to cause anterograde amnesia when damaged in humans. In contrast, the same rats with ventral tegmental nucleus lesions performed normally on two control tasks: the acquisition and subsequent reversal of an egocentric discrimination task and a visually cued task in the water maze. This study provides the first clear evidence that the VTNg is critical for memory, and consequently indicates that diencephalic-hippocampal models of memory should be extended to incorporate the limbic midbrain.