Neurocomputational models have long posited that episodic memories in the human hippocampus are represented by sparse, stimulus-specific neural codes. A concomitant proposal is that when sparse-distributed neural assemblies become active, they suppress the activity of competing neurons (neural sharpening). We investigated episodic memory coding in the hippocampus and amygdala by measuring single-neuron responses from 20 epilepsy patients (12 female) undergoing intracranial monitoring while they completed a continuous recognition memory task. In the left hippocampus, the distribution of single-neuron activity indicated that only a small fraction of neurons exhibited strong responding to a given repeated word and that each repeated word elicited strong responding in a different small fraction of neurons. This finding reflects sparse distributed coding. The remaining large fraction of neurons exhibited a concurrent reduction in firing rates relative to novel words. The observed pattern accords with longstanding predictions that have previously received scant support from single-cell recordings from human hippocampus.