The entorhinal–hippocampus network plays a central role in navigation and episodic memory formation. To investigate these interactions, we examined the effect of medial entorhinal cortex lesions on hippocampal place cell activity. Since the medial entorhinal cortex is suggested to play a role in the processing of self-motion information, we hypothesised that such processing would be necessary for maintaining stable place fields in the absence of environmental cues. Place cells were recorded as medial entorhinal cortex–lesioned rats explored a circular arena during five 16-min sessions comprising a baseline session with all sensory inputs available followed by four sessions during which environmental (i.e. visual, olfactory, tactile) cues were progressively reduced to the point that animals could rely exclusively on self-motion cues to maintain stable place fields. We found that place field stability and a number of place cell firing properties were affected by medial entorhinal cortex lesions in the baseline session. When rats were forced to rely exclusively on self-motion cues, within-session place field stability was dramatically decreased in medial entorhinal cortex rats relative to SHAM rats. These results support a major role of the medial entorhinal cortex in processing self-motion cues, with this information being conveyed to the hippocampus to help anchor and maintain a stable spatial representation during movement.