Many studies indicate that recognition memory involves at least two separable processes, familiarity discrimination and recollection. Aspects of what is known of potential neuronal substrates of familiarity discrimination are reviewed. Lesion studies have established that familiarity discrimination for individual visual stimuli is effected by a system centred on the perirhinal cortex of the temporal lobe. The fundamental change that encodes prior occurrence of such stimuli appears to be a reduction in the response of neurons in anterior inferior temporal (including perirhinal) cortex when a stimulus is repeated. The neuronal responses rapidly signal the presence of a novel stimulus, and are evidence of long–lasting learning after a single exposure. Computational modelling indicates that a neuronal network based on such a change in responsiveness is potentially highly efficient in information theoretic terms. Processes that occur in long–term depression within the perirhinal cortex provide candidate synaptic plastic mechanisms for that underlying the change, but such linkage remains to be experimentally established.