Functional magnetic resonance imaging (MRI) studies have demonstrated a critical role of hippocampus and inferior frontal gyrus (IFG) in associative memory. Similarly, evidence from structural MRI studies suggests a relationship between gray-matter volume in these regions and associative memory. However, how brain volume and activity relate to each other during associative-memory formation remains unclear. Here, we used joint independent component analysis (jICA) to examine how gray-matter volume and brain activity would be associated during associative encoding, especially in medial-temporal lobe (MTL) and IFG. T1-weighted images were collected from 27 young adults, and functional MRI was employed during intentional encoding of object pairs. A subsequent recognition task tested participants' memory performance. Unimodal analyses using voxel-based morphometry revealed that participants with better associative memory showed larger gray-matter volume in left anterior hippocampus. Results from the jICA revealed one component that comprised a covariance pattern between gray-matter volume in anterior and posterior MTL and encoding-related activity in IFG. Our findings suggest that gray matter within the MTL modulates distally distinct parts of the associative encoding circuit, and extend previous studies that demonstrated MTL-IFG functional connectivity during associative memory tasks.