The hippocampus plays a central role in memory consolidation, a process for converting short-term memory into cortically stored, long-lasting memory in the mammalian brain. Here, we review recent data and discuss the 'synaptic re-entry reinforcement' (SRR) hypothesis, which can account for the role of the hippocampus in memory consolidation at both the molecular and systems levels. The central idea of the SRR hypothesis is that reactivation of neural ensembles in the hippocampus during the consolidation period results in multiple rounds of NMDA-receptor-dependent synaptic reinforcement of the hippocampal memory traces created during initial learning. In addition, such reactivation and reinforcement processes permit the hippocampus to act as a 'coincidence regenerator', providing coordinated input that drives the coherent reactivation of cortical neurons, resulting in the progressive strengthening of cortical memory traces through reactivation of cortical NMDA receptors.