The role of the hippocampus in processing contextual cues has been well recognized. Contextual manipulation often involves transferring animals between different rooms. Because of vague definition of context in such a paradigm, however, it has been difficult to study the role of the hippocampus parametrically in contextual information processing. We designed a novel task in which a different context can be parametrically defined by the spatial configuration of distal cues. In this task, rats were trained to associate two different configurations of distal cue-sets (standard contexts) with different food-well locations at the end of a radial arm. Experiment 1 tested the role of the dorsal hippocampus in retrieving well-learned associations between standard contexts and rewarding food-well locations by comparing rats with neurotoxic lesions in the dorsal hippocampus with controls. We found that the hippocampal-lesioned rats were unable to retrieve the context-place paired associations learned before surgery. To further test the role of the hippocampus in generalizing altered context, in Experiment 2, rats were trained in a task in which modified versions of the standard contexts (ambiguous contexts) were presented, intermixed with the standard contexts. Rats were able to process the ambiguous contexts immediately by using their similarities to the standard contexts, whereas muscimol inactivation of the dorsal hippocampus in the same animals reversibly deprived such capability. The results suggest that rats can effectively associate discrete spatial locations with spatial configuration of distal cues. More important, rats can generalize or orthogonalize modified contextual environments using learned contextual representation of the environment. V