Animals including humans engage in goal-directed behavior flexibly in response to items and their background, which is called contextual behavior in this review. Although the concept of context has long been studied, there are differences among researchers in defining and experimenting with the concept. The current review aims to provide a categorical framework within which not only the neural mechanisms of contextual information processing but also the contextual behavior can be studied in more concrete ways. For this purpose, we categorize contextual behavior into three subcategories as follows by considering the types of interactions among context, item, and response: contextual response selection, contextual item selection, and contextual item–response selection. Contextual response selection refers to the animal emitting different types of responses to the same item depending on the context in the background. Contextual item selection occurs when there are multiple items that need to be chosen in a contextual manner. Finally, when multiple items and multiple contexts are involved, contextual item–response selection takes place whereby the animal either chooses an item or inhibits such a response depending on item–context paired association. The literature suggests that the rhinal cortical regions and the hippocampal formation play key roles in mnemonically categorizing and recognizing contextual representations and the associated items. In addition, it appears that the fronto-striatal cortical loops in connection with the contextual information-processing areas critically control the flexible deployment of adaptive action sets and motor responses for maximizing goals. We suggest that contextual information processing should be investigated in experimental settings where contextual stimuli and resulting behaviors are clearly defined and measurable, considering the dynamic top-down and bottom-up interactions among the neural systems for contextual behavior.