The supramammillary area of the hypothalamus, although small in size, can have profound modulatory effects on the hippocampal formation and related temporal cortex. It can control hippocampal plasticity and also has recently been shown to contain cells that determine the frequency of hippocampal rhythmical slow activity (theta rhythm). We review here its organization and anatomical connections providing an atlas and a new nomenclature. We then review its functions particularly in relation to its links with the hippocampus. Much of its control of behaviour and its differential activation by specific classes of stimuli is consistent with a tight relationship with the hippocampus. However, its ascending connections involve not only caudal areas of the cortex with close links to the hippocampus but also reciprocal connections with more rostral areas such as the infralimbic and anterior cingulate cortices. These latter areas appear to be the most rostral part of a network that, via the medial septum, hippocampus and lateral septum, is topographically mapped into the hypothalamus. The supramammillary area is thus diffusely connected with areas that control emotion and cognition and receives more topographically specific return information from areas that control cognition while also receiving ascending information from brain stem areas involved in emotion. We suggest that it is a key part of a network that recursively transforms information to achieve integration of cognitive and emotional aspects of goal-directed behaviour.