Children from lower income backgrounds tend to have poorer memory and language abilities than their wealthier peers. It has been proposed that these cognitive gaps reflect the effects of income-related stress on hippocampal structure, but the empirical evidence for this relationship has not been clear. Here, we examine how family income gaps in cognition relate to the anterior hippocampus, given its high sensitivity to stress, versus the posterior hippocampus. We find that anterior (but not posterior) hippocampal volumes positively correlate with family income up to an annual income of ~$75,000. Income-related differences in the anterior (but not posterior) hippocampus also predicted the strength of the gaps in memory and language. These findings add anatomical specificity to current theories by suggesting a stronger relationship between family income and anterior than posterior hippocampal volumes and offer a potential mechanism through which children from different income homes differ cognitively.