The hippocampus shrinks in late adulthood, leading to impaired memory and increased risk for dementia. Hippocampal and medial temporal lobe volumes are larger in higher-fit adults, and physical activity training increases hippocampal perfusion, but the extent to which aerobic exercise training can modify hippocampal volume in late adulthood remains unknown. Here we show, in a randomized controlled trial with 120 older adults, that aerobic exercise training increases the size of the anterior hippocampus, leading to improvements in spatial memory. Exercise training increased hippocampal volume by 2%, effectively reversing age-related loss in volume by 1 to 2 y. We also demonstrate that increased hippocampal volume is associated with greater serum levels of BDNF, a mediator of neurogenesis in the dentate gyrus. Hippocampal volume declined in the control group, but higher preintervention fitness partially attenuated the decline, suggesting that fitness protects against volume loss. Caudate nucleus and thalamus volumes were unaffected by the intervention. These theoretically important findings indicate that aerobic exercise training is effective at reversing hippocampal volume loss in late adulthood, which is accompanied by improved memory function.