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Memory is typically thought of as enabling reminiscence about past experiences. However, memory also informs and guides processing of future experiences. These two functions of memory are often at odds: Remembering specific experiences from the past requires storing idiosyncratic properties that define particular moments in space and time, but by definition such properties will not be shared with similar situations in the future and thus may not be applicable to future situations. We discovered that, when faced with this conflict, the brain prioritizes prediction over encoding. Behavioral tests of recognition and source recall showed that items allowing for prediction of what will appear next based on learned regularities were less likely to be encoded into memory. Brain imaging revealed that the hippocampus was responsible for this interference between statistical learning and episodic memory. The more that the hippocampus predicted the category of an upcoming item, the worse the current item was encoded. This competition may serve an adaptive purpose, focusing encoding on experiences for which we do not yet have a predictive model.