The idea of ‘extended self’ refers to the incorporation of personally relevant external stimuli into one’s concept of self. The current study used a transient imagined ownership paradigm to explore brain regions that support the association between self and objects. We hypothesized that incidental associations between self and objects would be manifested by activation in a brain region, medial prefrontal cortex (MPFC), recruited in explicit self-referential processing. We further predicted that a memorial advantage for, and positivity-bias towards, self-relevant objects would be related to activity in MPFC. As anticipated, MPFC showed greater activation when objects were assigned to participants compared to when objects were assigned to another person. Activity in MPFC was also associated with superior subsequent source memory and increased preference for objects assigned to the self. These findings provide neural evidence for the incorporation of self-relevant objects into an extended self, which, in turn, increases their judged value (mere ownership effect).