The hippocampal system is critical for storage and retrieval of declarative memories, including memories for locations and events that take place at those locations. Spatial memories place high demands on capacity. Memories must be distinct to be recalled without interference and encoding must be fast. Recent studies have indicated that hippocampal networks allow for fast storage of large quantities of uncorrelated spatial information. The aim of the this article is to review and discuss some of this work, taking as a starting point the discovery of multiple functionally specialized cell types of the hippocampal-entorhinal circuit, such as place, grid, and border cells. We will show that grid cells provide the hippocampus with a metric, as well as a putative mechanism for decorrelation of representations, that the formation of environment-specific place maps depends on mechanisms for long-term plasticity in the hippocampus, and that long-term spatiotemporal memory storage may depend on offline consolidation processes related to sharp-wave ripple activity in the hippocampus. The multitude of representations generated through interactions between a variety of functionally specialized cell types in the entorhinal-hippocampal circuit may be at the heart of the mechanism for declarative memory formation.