Contextual information plays a key role in learning and memory. Learned information becomes associated with the context such that the context can cue the relevant memories and behaviors. An extensive literature involving experimental brain lesions has implicated the hippocampus in context processing. However, the neurophysiological mechanisms of context coding are not known. Although "context" has typically been defined in terms of the background cues, recent studies indicate that hippocampal neurons are sensitive to subtle changes in task demands, even in an unchanging environment. Thus, the context may also include non-environmental features of a learning situation. In the present study, hippocampal neuronal activity was recorded while rats learned to approach different reward locations in two contexts. Because all of the training took place in the same environment, the contexts were defined by the task demands rather than by environmental stimuli. Learning to differentiate two such contexts was associated with the development of highly context-specific neuronal firing patterns. These included different place fields in pyramidal neurons and different event (e.g., reward) responses in pyramidal and interneurons. The differential firing patterns did not develop in a control condition that did not involve a context manipulation. The context-specific firing patterns could modulate activity in extrahippocampal structures to prime context-appropriate behavioral responses and memories. These results provide direct support for a context processing role of the hippocampus and suggest that the hippocampus contributes contextual representations to episodic memories.