Behavioural variant frontotemporal dementia (bvFTD) can present with episodic memory deficits as severe as those in Alzheimer’s disease (AD). Little is known of the integrity of grey matter areas and white matter tracts of the Papez memory circuit in these diseases. The integrity of the Papez circuit (hippocampus, fornix, mammillary bodies, anterior thalamus, cingulate cortex) was investigated in vivo and at postmortem in bvFTD and AD cohorts using voxel-based morphometry, diffusion tensor imaging and manual volumetric tracing. Our findings indicate that bvFTD and AD show similar degrees of hippocampal atrophy in vivo, but bvFTD patients show greater hippocampal atrophy at postmortem, with the FTLD-TDP subtype being particularly affected. Cingulate cortex findings show an expected atrophy pattern with bvFTD being affected more anteriorly and AD showing more posterior atrophy. More importantly, subcortical Papez circuit regions (fornix and anterior thalamus) were affected in bvFTD only, with atrophy in these regions determining the degree of amnesia in bvFTD. Hippocampal atrophy does not appear to be an efficient diagnostic marker for underlying bvFTD or AD pathology, although for bvFTD, episodic memory deficits in conjunction with marked hippocampal atrophy emerge as potential biomarkers for FTLD-TDP pathology. Subregions of Papez circuit were differentially affected in bvFTD and AD with subcortical regions determining the degree of episodic memory deficits in bvFTD. Subcortical atrophy should be taken into account when establishing whether the severe amnesia observed in a patient is likely due to bvFTD or AD pathology.