Anterior temporal lobe resection can control seizures in up to 80% of patients with temporal lobe epilepsy. Memory decrements are the main neurocognitive complication. Preoperative functional reorganization has been described in memory networks, but less is known of postoperative reorganization. We investigated reorganization of memory-encoding networks preoperatively and 3 and 12 months after surgery. We studied 36 patients with unilateral medial temporal lobe epilepsy (19 right) before and 3 and 12 months after anterior temporal lobe resection. Fifteen healthy control subjects were studied at three equivalent time points. All subjects had neuropsychological testing at each of the three time points. A functional magnetic resonance imaging memory-encoding paradigm of words and faces was performed with subsequent out-of-scanner recognition assessments. Changes in activations across the time points in each patient group were compared to changes in the control group in a single flexible factorial analysis. Postoperative change in memory across the time points was correlated with postoperative activations to investigate the efficiency of reorganized networks. Left temporal lobe epilepsy patients showed increased right anterior hippocampal and frontal activation at both 3 and 12 months after surgery relative to preoperatively, for word and face encoding, with a concomitant reduction in left frontal activation 12 months postoperatively. Right anterior hippocampal activation 12 months postoperatively correlated significantly with improved verbal learning in patients with left temporal lobe epilepsy from preoperatively to 12 months postoperatively. Preoperatively, there was significant left posterior hippocampal activation that was sustained 3 months postoperatively at word encoding, and increased at face encoding. For both word and face encoding this was significantly reduced from 3 to 12 months postoperatively. Patients with right temporal lobe epilepsy showed increased left anterior hippocampal activation on word encoding from 3 to 12 months postoperatively compared to preoperatively. On face encoding, left anterior hippocampal activations were present preoperatively and 12 months postoperatively. Left anterior hippocampal and orbitofrontal cortex activations correlated with improvements in both design and verbal learning 12 months postoperatively. On face encoding, there were significantly increased left posterior hippocampal activations that reduced significantly from 3 to 12 months postoperatively. Postoperative changes occur in the memory-encoding network in both left and right temporal lobe epilepsy patients across both verbal and visual domains. Three months after surgery, compensatory posterior hippocampal reorganization that occurs is transient and inefficient. Engagement of the contralateral hippocampus 12 months after surgery represented efficient reorganization in both patient groups, suggesting that the contralateral hippocampus contributes to memory outcome 12 months after surgery.