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Building knowledge schemas that organize information and guide future learning is of great importance in everyday life. Such knowledge building is suggested to occur through reinstatement of prior knowledge during new learning, yielding integration of new with old memories supported by the medial prefrontal cortex (mPFC) and medial temporal lobe (MTL). Congruency with prior knowledge is also known to enhance subsequent memory. Yet, how reactivation and congruency interact to optimize memory integration is unknown. To investigate this question, we used an adapted AB-AC inference paradigm in combination with functional Magnetic Resonance Imaging (fMRI). Participants first studied an AB-association followed by an AC-association, so B (a scene) and C (an object) were indirectly linked through A (a pseudoword). BC-associations were either congruent or incongruent with prior knowledge (e.g. bathduck or hammer in a bathroom), and participants reported subjective B-reactivation strength while learning AC. Behaviorally, both congruency and reactivation enhanced memory integration. In the brain, these behavioral effects related to univariate and multivariate parametric effects in the MTL, mPFC, and Parahippocampal Place Area (PPA). Moreover, mPFC exhibited larger PPA-connectivity for more congruent associations. These outcomes provide insights into the neural mechanisms underlying memory enhancement, which has value for educational learning. [ABSTRACT FROM AUTHOR]