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There is substantial behavioral evidence for a phenomenon commonly called “the testing effect”, i.e. superior memory performance after repeated testing compared to re-study of to-be-learned materials. However, considerably less is known about the underlying neuro-cognitive processes that are involved in the initial testing phase and thus underlies the actual testing effect. Here, we investigated functional brain activity related to test-enhanced learning with feedback. Subjects learned foreign vocabulary across three consecutive tests with correct-answer feedback. Functional brain-activity responses were analyzed in relation to retrieval and feedback events, respectively. Results revealed up-regulated activity in fronto-striatal regions during the first successful retrieval, followed by a marked reduction in activity as a function of improved learning. Whereas feedback improved behavioral performance across consecutive tests, feedback had a negligable role after the first successful retrieval for functional brain-activity modulations. It is suggested that the beneficial effects of test-enhanced learning is regulated by feedback-induced updating of memory representations, mediated via the striatum, that might underlie the stabilization of memory commonly seen in behavioral studies of the testing effect.