Adolescents are notorious for engaging in reward-seeking behaviors, a tendency attributed to heightened activity in the brain's reward systems during adolescence. It has been suggested that reward sensitivity in adolescence might be adaptive, but evidence of an adaptive role has been scarce. Using a probabilistic reinforcement learning task combined with reinforcement learning models and fMRI, we found that adolescents showed better reinforcement learning and a stronger link between reinforcement learning and episodic memory for rewarding outcomes. This behavioral benefit was related to heightened prediction error-related BOLD activity in the hippocampus and to stronger functional connectivity between the hippocampus and the striatum at the time of reinforcement. These findings reveal an important role for the hippocampus in reinforcement learning in adolescence and suggest that reward sensitivity in adolescence is related to adaptive differences in how adolescents learn from experience.