The parahippocampal cortex (PHC) plays a key role in episodic memory, spatial processing, and the encoding of novel stimuli. Recent studies proposed that the PHC is largely involved in contextual associative processing. Consequently, the function of this region has been a hot debate in cognitive neuroscience. To test this assumption, we used two types of experimental materials to form the contextual associative memory: visual objects in reality and meaningless visual shapes. New associations were modeled from either the contextual objects or the contextual shapes. Both contextual objects and shapes activated the bilateral PHC more than the noncontextual ones. The contextual objects with semantics significantly activated the left PHC areas, whereas the meaningless contextual shapes significantly elicited the right PHC. The results clearly demonstrate that the PHC influences the processing of contextual information and provides experimental evidence for an understanding of the different functions of bilateral PHC in contextual associative memory.