Prior studies identify two cortical areas, posterior parahippocampal cortex and retrosplenial cortex, that preferentially activate to images of real-world scenes compared to images of other meaningful visual stimuli such as objects and faces. Behavioral and computational studies suggest that sub categories of real-world scenes differ in their visual and semantic properties. It is presently unknown whether the cortical areas that have been implicated in scene analysis similarly activate differentially to behaviorally relevant scene sub-categories. To examine this issue, we directly compared cortical activation to indoor and outdoor scenes in an fMRI study with a large number of non repeated images in each condition. Activation in posterior parahippocampal cortex, including parahippocampal place area, was significantly greater for indoor than outdoor scenes. In contrast, no such difference was observed in retrosplenial cortex, though this region preferentially activated to scenes over faces. These findings suggest differences in function in these two areas. The results are consistent with the view that posterior parahippocampal cortex is functional in processing local space.