Gray matter brain structures, including deep nuclei and the cerebral cortex, are affected significantly and early in the course of multiple sclerosis and these changes may not be directly related to demyelinating white matter lesions. The hippocampus is an archicortical structure that is critical for memory functions and is especially sensitive to multiple insults including inflammation. We used high-resolution MR imaging at 3.0 T to measure hippocampal volumes in relapsing remitting MS (RRMS) and secondary progressive MS (SPMS) patients and controls. We found that both groups of MS patients had hippocampal atrophy and that this volume loss was in excess of global brain atrophy. Subregional analysis revealed selective volume loss in the cornu ammonis (CA) 1 region of the hippocampus in RRMS with further worsening of CA1 loss and extension into other CA regions in SPMS. Hippocampal atrophy was not correlated with T2-lesion volumes, and right and left hippocampi were affected equally. Volume loss in the hippocampus and subregions was correlated with worsening performance on word-list learning, a task requiring memory encoding, but not with performance on the Paced Auditory Serial Addition Task (PASAT), a test of information processing speed. Our findings provide evidence for selective and progressive hippocampal atrophy in MS localized initially to the CA1 subregion that is associated with deficits in memory encoding and retrieval. The underlying histopathological substrate for this selective, symmetric and disproportionate regional hippocampal vulnerability remains speculative at this time. Further understanding of this process could provide targets for therapeutic interventions including neuroprotective treatments.