The hippocampus is thought to compare predicted events with current perceptual input, generating a mismatch signal when predictions are violated. However, most prior studies have only inferred when predictions occur without measuring them directly. Moreover, an important but unresolved question is whether hippocampal mismatch signals are modulated by the degree to which predictions differ from outcomes. Here, we conducted a human fMRI study in which subjects repeatedly studied various word-picture pairs, learning to predict particular pictures (outcomes) from the words (cues). After initial learning, a subset of cues was paired with a novel, unexpected outcome, whereas other cues continued to predict the same outcome. Critically, when outcomes changed, the new outcome was either "near" to the predicted outcome (same visual category as the predicted picture) or "far" from the predicted outcome (different visual category). Using multivoxel pattern analysis, we indexed cue-evoked reactivation (prediction) within neocortical areas and related these trial-by-trial measures of prediction strength to univariate hippocampal responses to the outcomes. We found that prediction strength positively modulated hippocampal responses to unexpected outcomes, particularly when unexpected outcomes were close, but not identical, to the prediction. Hippocampal responses to unexpected outcomes were also associated with a tradeoff in performance during a subsequent memory test: relatively faster retrieval of new (updated) associations, but relatively slower retrieval of the original (older) associations. Together, these results indicate that hippocampal mismatch signals reflect a comparison between active predictions and current outcomes and that these signals are most robust when predictions are similar, but not identical, to outcomes.