Episodic memories are modulated by rewards and punishments. Previous studies have reported that monetary rewards and punishments enhance episodic memories, and the interactions between reward-related regions such as the ventral striatum (vS) and memory-related regions such as the hippocampus contribute to this enhancement. However, it remains unclear how the neural mechanisms underlying the memory enhancement by rewards and punishments are modulated in social context. Our fMRI study investigated this issue. 30 college students participated in this study. Before encoding, participants were taken their pictures, and were shown a fictitious story that students in another college or computer programs would decide to give monetary rewards (Reward), punishments (Punishment), or nothing (Control) by their pictures. During encoding with fMRI, participants were presented with silhouette pictures, which substitute for students in another college (Human) and computer programs (Machine), and with values of Reward/Punishment/Control decided by the students or computers. During retrieval, participants recognized whether the silhouette pictures were old or new with two confidence levels. In behavioral data, participants showed higher inference of other's intentions and values of positive and negative emotions in both Reward and Punishment than in Control, but the enhancement was larger in Human than in Machine. Response times during retrieval were significantly faster in Human/Reward than in the other conditions. In fMRI data, the lateral prefrontal cortex (lPFC) involved in the intention inference and the vS showed greater activations in Reward than Punishment or Control, and hippocampal activations reflected the successful encoding of memories. In addition, correlations between activations in the hippocampus and lPFC were significantly higher in Human/Reward than in Human/Control and Machine/Reward. These findings suggest that monetary rewards received in social context could enhance the successful encoding of memories, and that the memory enhancement could be associated with the interaciton between the lPFC and hippocampus.