Adaptive motivated behavior requires predictive internal representations of the environment, and surprising events are indications for encoding new representations of the environment. The medial temporal lobe memory system, including the hippocampus and surrounding cortex, encodes surprising events and is influenced by motivational state. Because behavior reflects the goals of an individual, we investigated whether motivational valence (i.e., pursuing rewards versus avoiding punishments) also impacts neural and mnemonic encoding of surprising events. During functional magnetic resonance imaging (fMRI), participants encountered perceptually unexpected events either during the pursuit of rewards or avoidance of punishments. Despite similar levels of motivation across groups, reward and punishment facilitated the processing of surprising events in different medial temporal lobe regions. Whereas during reward motivation, perceptual surprises enhanced activation in the hippocampus, during punishment motivation surprises instead enhanced activation in parahippocampal cortex. Further, we found that reward motivation facilitated hippocampal coupling with ventromedial PFC, whereas punishment motivation facilitated parahippocampal cortical coupling with orbitofrontal cortex. Behaviorally, post-scan testing revealed that reward, but not punishment, motivation resulted in greater memory selectivity for surprising events encountered during goal pursuit. Together these findings demonstrate that neuromodulatory systems engaged by anticipation of reward and punishment target separate components of the medial temporal lobe, modulating medial temporal lobe sensitivity and connectivity. Thus, reward and punishment motivation yield distinct neural contexts for learning, with distinct consequences for how surprises are incorporated into predictive mnemonic models of the environment.