Behavioural variant frontotemporal dementia can present with episodic memory deficits as severe as those in Alzheimer's disease. Little is known of the integrity of grey matter areas and white matter tracts of the Papez memory circuit in these diseases. The integrity of the Papez circuit (hippocampus, fornix, mammillary bodies, anterior thalamus, cingulate cortex) was investigated in vivo and at post-mortem in behavioural variant frontotemporal dementia and Alzheimer's disease cohorts using voxel-based morphometry, diffusion tensor imaging and manual volumetric tracing. Our findings indicate that behavioural variant frontotemporal dementia and Alzheimer's disease show similar degrees of hippocampal atrophy in vivo, but patients with behavioural variant frontotemporal dementia show greater hippocampal atrophy at post-mortem, with the frontotemporal lobar degeneration with TDP-43 inclusions subtype being particularly affected. Cingulate cortex findings show an expected atrophy pattern with behavioural variant frontotemporal dementia being affected more anteriorly and Alzheimer's disease showing more posterior atrophy. More importantly, subcortical Papez circuit regions (fornix and anterior thalamus) were affected in behavioural variant frontotemporal dementia only, with atrophy in these regions determining the degree of amnesia in behavioural variant frontotemporal dementia. Hippocampal atrophy does not appear to be an efficient diagnostic marker for underlying behavioural variant frontotemporal dementia or Alzheimer's disease pathology, although for behavioural variant frontotemporal dementia, episodic memory deficits in conjunction with marked hippocampal atrophy emerge as potential biomarkers for frontotemporal lobar degeneration with TDP-43 inclusions pathology. Sub-regions of the Papez circuit were differentially affected in behavioural variant frontotemporal dementia and Alzheimer's disease with subcortical regions determining the degree of episodic memory deficits in behavioural variant frontotemporal dementia. Subcortical atrophy should be taken into account when establishing whether the severe amnesia observed in a patient is likely to be due to behavioural variant frontotemporal dementia or Alzheimer's disease pathology.