Recent brain imaging studies have shown that estrogens alter brain activation patterns upon working memory tasks in postmenopausal women. Estrogens, however, have many systemic side effects. We investigated the effect of the Selective estrogen receptor modulator (SERM) raloxifene on brain activation patterns during a memory task in postmenopausal women with functional magnetic resonance imaging (fMRI). Twenty postmenopausal and right handed women (mean age 65.7 years; SD 3.0) were included in this double blind, placebo controlled and randomized study. Whole brain fMRI was performed before and after three months of daily treatment with raloxifene 60 mg or placebo. Each scanning session consisted of a visual encoding task, a recognition test and a simple photic stimulation test. Data analyses was performed with SPM99b software. Specific regions of interest for the tasks were defined based on previous experiments. Visual encoding activated the ventral route, posterior medial temporal lobe and frontal cortex in both groups. Treatment interactions for raloxifene compared to placebo were a decrease in activation in the left parahippocampal gyrus and left lingual gyrus, and an increase in activation in the right superior frontal gyrus. The mean recognition test and the simple photic stimulation test showed no treatment interactions. Our results show that raloxifene affects brain activation patterns upon visual encoding in postmenopausal women.