Thirty volunteers randomly received either mild or deep propofol sedation, to assess its effect on explicit and implicit memory. Blood oxygen level-dependent functional magnetic resonance during sedation examined brain activation by auditory word stimulus and a process dissociation procedure was performed 4 h after scanning. Explicit memory formation did not occur in either group. Implicit memories were formed during mild but not deep sedation (p = 0.04). Mild propofol sedation inhibited superior temporal gyrus activation (Z value 4.37, voxel 167). Deep propofol sedation inhibited superior temporal gyrus (Z value 4.25, voxel 351), middle temporal gyrus (Z value 4.39, voxel 351) and inferior parietal lobule (Z value 5.06, voxel 239) activation. Propofol only abolishes implicit memory during deep sedation. The superior temporal gyrus is associated with explicit memory processing, while the formation of both implicit and explicit memories is associated with superior and middle temporal gyri and inferior parietal lobule activation.