Over 50 years of research has revealed a critical role for the hippocampus in the formation of long-term declarative memories. More recent evidence has specified the functions of the hippocampus as the binding and comparison of memory representations that may be used under shorter, as well as longer, delays (Olsen, Moses, Riggs, & Ryan, 2012). Hippocampal neural oscillations (e.g., theta rhythm) have been studied extensively in animals; however, the oscillations that underlie binding, comparison, and their relationship to memory performance remain to be fully explored in humans. Here magnetoencephalography was used to examine theta oscillations within the hippocampus and cortex to address this critical gap in the literature. The task consisted of (a) an encoding phase in which participants had to integrate the relative spatial positions among 3 sequentially presented objects, (b) a delay phase, and (c) a test phase in which all study objects were presented simultaneously in novel locations, and participants had to indicate whether the relative positions had changed. Theta power in the hippocampus and medial prefrontal cortex (PFC) increased across encoding and delay periods during which binding and maintenance processes dominate, while comparison of spatial relations at test was associated with greater theta power in right lateral PFC and intraparietal sulcus for manipulated versus intact trials. Critically, relational memory was positively related to hippocampal theta power increases across the encoding period. These findings provide novel evidence for the role of hippocampal theta in the incremental formation and retention of relations across space and time.