Novelty detection, a critical computation within the medial temporal lobe (MTL) memory system, necessarily depends on prior experience. The current study used functional magnetic resonance imaging (fMRI) in humans to investigate dynamic changes in MTL activation and functional connectivity as experience with novelty accumulates. fMRI data were collected during a target detection task: Participants monitored a series of trial-unique novel and familiar scene images to detect a repeating target scene. Even though novel images themselves did not repeat, we found that fMRI activations in the hippocampus and surrounding cortical MTL showed a specific, decrementing response with accumulating exposure to novelty. The significant linear decrement occurred for the novel but not the familiar images, and behavioral measures ruled out a corresponding decline in vigilance. Additionally, early in the series, the hippocampus was inversely coupled with the dorsal striatum, lateral and medial prefrontal cortex, and posterior visual processing regions; this inverse coupling also habituated as novelty accumulated. This novel demonstration of a dynamic adjustment in neural responses to novelty suggests a similarly dynamic allocation of neural resources based on recent experience.