Frontotemporal cortex flexibly adapts latent structural representations

Humans excel at navigating complex environments by forming abstract structural representations that can be flexibly updated when environments change. Here, we examine how the brain dynamically reconfigures these internal models in response to covert changes in latent hierarchies. Using a novel inference task and fMRI repetition suppression, we find that stable relational knowledge is encoded in medial orbitofrontal cortex (mOFC), while structural changes trigger transient representations across hippocampal and prefrontal regions. Newly inferred associations are first encoded in anterior medial frontal cortex (amFC) and migrate ventrally to mOFC when settling. In contrast, outdated associations transiently engage frontopolar cortex and hippocampus, with the hippocampus, but not frontal areas, retaining a residual memory trace. Notably, the strength of early novel signals in amFC and hippocampus tracks individual differences in behavioural adaptation. Together, these results characterise mechanisms supporting adaptive structural reconfiguration in the human brain, with implications for cognitive inflexibility in psychiatric disorders.