The neural correlate of anterograde amnesia in Wernicke-Korsakoff syndrome (WKS) is still debated. While the capacity to learn new information has been associated with integrity of the medial temporal lobe (MTL), previous studies indicated that the WKS is associated with diencephalic lesions, mainly in the mammillary bodies and anterior or dorsomedial thalamic nuclei. The present study tested the hypothesis that amnesia in WKS is associated with a disrupted neural circuit between diencephalic and hippocampal structures. High-density evoked potentials were recorded in four severely amnesic patients with chronic WKS, in five patients with chronic alcoholism without WKS, and in ten age matched controls. Participants performed a continuous recognition task of pictures previously shown to induce a left medial temporal lobe dependent positive potential between 250 and 350 ms. In addition, the integrity of the fornix was assessed using diffusion tensor imaging (DTI). WKS, but not alcoholic patients without WKS, showed absence of the early, left MTL dependent positive potential following immediate picture repetitions. DTI indicated disruption of the fornix, which connects diencephalic and hippocampal structures. The findings support an interpretation of anterograde amnesia in WKS as a consequence of a disconnection between diencephalic and MTL structures with deficient contribution of the MTL to rapid consolidation.