While manual tracing is the method of choice in measuring hippocampal volume, its time intensive nature and proneness to human error make automated methods attractive, especially when applied to large samples. Few studies have systematically compared the performance of the two techniques. In this study, we measured hippocampal volumes in a large (N = 403) population-based sample of individuals aged 44-48 years using manual tracing by a trained researcher and automated procedure using Freesurfer (http://surfer.nmr.mgh.harvard.edu) imaging suite. Results showed that absolute hippocampal volumes assessed with these methods were significantly different, with automated measures using the Freesurfer software suite being significantly larger, by 23% for the left and 29% for the right hippocampus. The correlation between the two methods varied from 0.61 to 0.80, with lower correlations for hippocampi with visible abnormalities. Inspection of 2D and 3D models suggested that this difference was largely due to greater inclusion of boundary voxels by the automated method and variations in subiculum/entorhinal segmentation. The correlation between left and right hippocampal volumes was very similar by the two methods. The relationship of hippocampal volumes to selected sociodemographic and cognitive variables was not affected by the measurement method, with each measure showing an association with memory performance and suggesting that both were equally valid for this purpose. This study supports the use of automated measures, based on Freesurfer in this instance, as being sufficiently reliable and valid particularly in the context of larger sample sizes when the research question does not rely on 'true' hippocampal volumes.