Background: Electroconvulsive therapy (ECT) is an efficient and rapid-acting treatment indicated for severe depressive disorders. While ECT is commonly accompanied by transient memory decline, the brain mechanisms underlying these side effects remain unclear. Aims: In this exploratory functional magnetic resonance (fMRI) study, we aimed to compare effects of ECT versus pharmacological treatment on neural response during episodic memory encoding in patients with affective disorders. Methods: This study included 32 ECT-treated patients (major depressive disorder (MDD), n = 23; bipolar depression, n = 9) and 40 partially remitted patients in pharmacological treatment (MDD, n = 24; bipolar disorder, n = 16). Participants underwent neuropsychological assessment, a strategic picture encoding fMRI scan paradigm, and mood rating. The ECT group was assessed before ECT (pre-ECT) and 3 days after their eighth ECT session (post-ECT). Results: Groups were comparable on age, gender, and educational years (ps ⩾ 0.05). Within-group analyses revealed a selective reduction in verbal learning and episodic memory pre- to post-ECT (p = 0.012) but no decline in global cognitive performance (p = 0.3). Functional magnetic resonance imaging analyses adjusted for mood symptoms revealed greater activity in ECT-treated patients than pharmacologically treated No-ECT patients across left precentral gyrus (PCG), right dorsomedial prefrontal cortex (dmPFC), and left middle frontal gyrus (MFG). In ECT-treated patients, greater decline in verbal learning and memory performance from pre- to post-ECT correlated with higher PCG response (r = −0.46, p = 0.008), but not with dmPFC or MFG activity (ps ⩾ 0.1), post-ECT. Conclusions: Episodic memory decline was related to greater neural activity in the left PCG, but unrelated to increased dmPFC and MFG activity, immediately after ECT.