The fasciola cinereum (FC) is a subregion of the hippocampus that has received relatively little attention compared with other hippocampal subregions with respect to anatomical characteristics and functional significance. Here, we show that the FC exhibits clear anatomical borders with the distalmost region of the CA1. Principal neurons in the FC resemble the granule cells in the dentate gyrus (DG). However, adult neurogenesis was not found unlike in the DG. The FC receives inputs mostly from the lateral entorhinal cortex and perirhinal cortex while projecting exclusively to the crest of the DG within the hippocampus. Neurotoxic lesions in the FC using colchicine impaired the acquisition, but not retrieval, of visual contextual memory in rats. FC lesions also impaired place recognition and object-in-place memory. As the rat performed the contextual memory task on the T-maze, place cells in the FC exhibited robust place fields and were indiscriminable from those in CA1 with respect to the basic firing properties. However, place cells in the FC fired only transiently in their place fields on the maze compared with those in CA1. Our findings suggest that the episodic firing pattern of the place cells in the FC may play critical roles in learning a novel contextual environment by facilitating temoporally structured contextual pattern separation in the DG of the hippocampus.