"Transitive inference" refers to the ability to judge from memory the relationships between indirectly related items that compose a hierarchically organized series, and this capacity is considered a fundamental feature of relational memory. Here we explored the role of the prefrontal cortex in transitive inference by examining the performance of mice with selective damage to the medial prefrontal cortex. Damage to the infralimbic and prelimbic regions resulted in significant impairment in the acquisition of a series of overlapping odor discrimination problems, such that animals with prefrontal lesions required twice as many trials to learn compared to sham-operated controls. Following eventually successful acquisition, animals with medial prefrontal lesions were severely impaired on a transitive inference probe test, whereas they performed as well as controls on a test that involved a nontransitive judgment from a novel odor pairing. These results suggest that the prefrontal cortex is part of an integral hippocampal-cortical network essential for relational memory organization.