We used functional MRI to investigate several hypotheses concerning the functions of posterior parahippocampal cortex and retrosplenial cortex, two regions that preferentially activate to images of real-world scenes compared to images of other meaningful visual stimuli such as objects and faces. We compared activation resulting from photographs of rooms, city streets, cityscapes, and landscapes against activation to a control condition of objects. Activation in posterior parahippocampal cortex, including parahippocampal place area, was greater for all scene types than objects, and greater for scenes that clearly convey information about local three-dimensional (3-D) structure (city streets and rooms) than scenes that do not (cityscapes and landscapes). Similar differences were observed in retrosplenial cortex, though activation was also greater for city streets than rooms. These results suggest that activation in both cortical areas is primarily related to analysis or representation of local 3-D space. The results are not consistent with hypotheses that these areas reflect panoramic spatial volume, an artificial versus natural category distinction, an indoor versus outdoor distinction, or the number of explicit objects depicted in a scene image.