11Beta-hydroxysteroid dehydrogenase type 1 (11β-HSD1) locally amplifies active glucocorticoids within specific tissues including in brain. In the hippocampus, 11β-HSD1 messenger RNA increases with aging. Here, we report significantly greater increases in intrahippocampal corticosterone (CORT) levels in aged wild-type (WT) mice during the acquisition and retrieval trials in a Y-maze than age-matched 11β-HSD1(-/-) mice, corresponding to impaired and intact spatial memory, respectively. Acute stress applied to young WT mice led to increases in intrahippocampal CORT levels similar to the effects of aging and impaired retrieval of spatial memory. 11β-HSD1(-/-) mice resisted the stress-induced memory impairment. Pharmacologic inhibition of 11β-HSD1 abolished increases in intrahippocampal CORT levels during the Y-maze trials and prevented spatial memory impairments in aged WT mice. These data provide the first in vivo evidence that dynamic increases in hippocampal 11β-HSD1 regenerated CORT levels during learning and retrieval play a key role in age- and stress-associated impairments of spatial memory.