In order to solve the 'sensitivity-stability' problem-and its immediate correlate, the problem of sequential learning-it is crucial to develop connectionist architectures that are simultaneously sensitive to, but not excessively disrupted by, new input. French (1992) suggested that to alleviate a particularly severe form of this disruption, catastrophic forgetting, it was necessary for networks to separate dynamically their internal representations during learning. McClelland et al. (1995) went even further. They suggested that nature's way of implementing this obligatory separation was the evolution of two separate areas of the brain, the hippocampus and the neocortex. In keeping with this idea of radical separation, a 'pseudo-recurrent' memory model is presented here that partitions a connectionist network into two functionally distinct, but continually interacting areas. One area serves as a final-storage area for representations; the other is an early-processing area where new representations are first learned by the system. The final-storage area continually supplies internally generated patterns (pseudopatterns; Robins, 1995), which are approximations of its content, to the early-processing area, where they are interleaved with the new patterns to be learned. Transfer of the new learning is done either by weight-copying from the early-processing area to the final-storage area or by pseudopattern transfer. A number of experiments are presented that demonstrate the effectiveness of this approach, allowing, in particular, effective sequential learning with gradual forgetting in the presence of new input. Finally, it is shown that the two interacting areas automatically produce representational compaction and it is suggested that similar representational streamlining may exist in the brain.