The goal of this work is to extend the theoretical understanding of the relationship between hippocampal spatial and memory functions to the level of neurophysiological mechanisms underlying spatial navigation and episodic memory retrieval. The proposed unifying theory describes both phenomena within a unique framework, as based on one and the same pathfinding function of the hippocampus. We propose a mechanism of reconstruction of the context of experience involving a search for a nearly shortest path in the space of remembered contexts. To analyze this concept in detail, we define a simple connectionist model consistent with available rodent and human neurophysiological data. Numerical study of the model begins with the spatial domain as a simple analogy for more complex phenomena. It is demonstrated how a nearly shortest path is quickly found in a familiar environment. We prove numerically that associative learning during sharp waves can account for the necessary properties of hippocampal place cells. Computational study of the model is extended to other cognitive paradigms, with the main focus on episodic memory retrieval. We show that the ability to find a correct path may be vital for successful retrieval. The model robustly exhibits the pathfinding capacity within a wide range of several factors, including its memory load (up to 30,000 abstract contexts), the number of episodes that become associated with potential target contexts, and the level of dynamical noise. We offer several testable critical predictions in both spatial and memory domains to validate the theory. Our results suggest that (1) the pathfinding function of the hippocampus, in addition to its associative and memory indexing functions, may be vital for retrieval of certain episodic memories, and (2) the hippocampal spatial navigation function could be a precursor of its memory function.The phenomenon of hippocampal spatial representations and the hippocampal role in episodic memory retrieval remain two of the most puzzling mysteries in cognitive neuroscience that intuitively seem to be connected to each other. Since the finding that the hippocampus plays a pivotal role in long-term memory consolidation (Scoville and Milner 1957; Zola-Morgan and Squire 1986), many proposals have been made regarding its specific role (Teyler and Discenna 1985;Squire 1987;O'Reilly and McClelland 1994;McClelland et al. 1995). A prominent view of the mechanisms underlying consolidation of episodic memories involves fast formation (e.g., via Hebbian mechanisms) of strong associations between hippocampal sparse patterns of activity and distributed neocortical representations. As a result, the former subsequently serve as pointers to the latter. This memory-indexing theory that goes back to Teyler andDiscenna (1985, 1986) and underlies several subsequent major theoretical contributions to the field (Nadel and Wheeler et al. 1997;Tulving 2002) assumes that a memory of an episode is retrieved by reactivating a hippocampal pointer to it. Consistent with this view, r...