Memories are consolidated during sleep by two apparently antagonistic processes: (1) reinforcement of memory-specific cortical interactions and (2) homeostatic reduction in synaptic efficiency. Using fMRI, we assessed whether episodic memories are processed during sleep by either or both mechanisms, by comparing recollection before and after sleep. We probed whether LTP influences these processes by contrasting two groups of individuals prospectively recruited based on BDNF rs6265 (Val66Met) polymorphism. Between immediate retrieval and delayed testing scheduled after sleep, responses to recollection increased significantly more in Val/Val individuals than in Met carriers in parietal and occipital areas not previously engaged in retrieval, consistent with "systems-level consolidation." Responses also increased differentially between allelic groups in regions already activated before sleep but only in proportion to slow oscillation power, in keeping with "synaptic downscaling." Episodic memories seem processed at both synaptic and systemic levels during sleep by mechanisms involving LTP.