For many years, the hippocampal formation has been implicated in the regulation of negative emotion, yet the nature of this link has remained elusive. Recent studies have made important links between the hippocampus and regulation of stress hormones that affect aversive memory. Additional studies have shown that the hippocampus regulates the gating of fear by contextual information. An emerging literature also links the hippocampus to prediction errors during fear learning and extinction. The mechanisms by which the hippocampus regulates negative emotion are clearly complicated, but suggest that interventions aimed at restoring normal hippocampal function may help with disorders of negative affect, such as depression or post-traumatic stress disorder and depression.