In recent years, there has been intense debate on the neural basis of associative priming, particularly on the role of the medial temporal lobe (MTL) in retrieving associative information without awareness. In this study, event-related fMRI was used while healthy subjects performed a perceptual identification task on briefly presented unrelated word pairs and an associative recognition memory task. Contamination of priming by explicit memory was successfully controlled, as associative priming and explicit memory were dissociated on the behavioral level. The fMRI results showed a functional dissociation within the MTL with respect to associative priming effects. The right parahippocampal cortex, but not the hippocampus, showed decreased activation for old vs. new pairs and old vs. recombined pairs (associative priming). The bilateral hippocampus and the right parahippocampal cortex were involved in explicit associative memory. These data provide evidence that subregions of the MTL participate in associative priming even when explicit involvement was controlled. Thus, different regions within the MTL play distinct roles in explicit and implicit associative memory.