Abstract Study Objectives Daytime naps can confer benefits on subsequent declarative learning, but the physiological correlates of this improvement are less well studied. We examined learning following a daytime nap compared with an equivalent waking period using fMRI and polysomnography. Methods Forty healthy young adults who slept normally the previous night encoded word pair lists in an MRI scanner at 13:00 and 16:30. Between sessions, participants either stayed awake and watched a documentary (Wake Group; N = 20) or had a 90-minute nap opportunity (Nap Group; N = 20) monitored by polysomnography. Approximately 40 minutes after completing each encoding session, memory for learned words was assessed using cued-recall. Results A significant Session × Group interaction effect (p < 0.001) was observed in which memory was significantly improved in the Nap but not in the Wake group (p < 0.001). There was also a Session × Run × Group interaction effect in the left hippocampus (p = 0.001), whereby activation during word pair encoding increased only following the nap. Both performance improvement (rs = 0.46, p = 0.04) and nap-related increase in hippocampal activation (rs = 0.46, p = 0.04) were correlated with nap spindle count (12–15 Hz) but not with slow oscillation power (p’s ≥ 0.18). Conclusions After a habitual nocturnal sleep, participants who had a 90-minute afternoon nap encoded word pairs better than a comparable group who stayed awake. Increases in hippocampal activation following the nap suggest restored hippocampal function. Naptime spindles may contribute to improved memory.