The transitive inference (TI) task assesses the ability to generalize learned knowledge to new contexts, and is thought to depend on the hippocampus (Dusek & Eichenbaum, 1997). Animals or humans learn in separate trials to choose stimulus A over B, B over C, C over D and D over E, via reinforcement feedback. Transitive responding based on the hierarchical structure A > B > C > D > E is then tested with the novel BD pair. We and others have argued that successful BD performance by animals – and even humans in some implicit studies – can be explained by simple reinforcement learning processes which do not depend critically on the hippocampus, but rather on the striatal dopamine system. We recently showed that the benzodiazepene midazolam, which is thought to disrupt hippocampal function, profoundly impaired human memory recall performance but actually enhanced implicit TI performance (Frank, O'Reilly & Curran, 2006). We posited that midazolam biased participants to recruit striatum during learning due to dysfunctional hippocampal processing, and that this change actually supported generalization of reinforcement values. Greene (2007) questions the validity of our pharmacological assumptions and argues that our conclusions are unfounded. Here we stand by our original hypothesis, which remains the most parsimonious account of the data, and is grounded by multiple lines of evidence.