Phase precession is a relational code that is thought to be important for episodic-like memory, for instance, the learning of a sequence of places. In the hippocampus, places are encoded through bursting activity of so-called place cells. The spikes in such a burst exhibit a precession of their firing phases relative to field potential theta oscillations (4–12 Hz); the theta phase of action potentials in successive theta cycles progressively decreases toward earlier phases. The mechanisms underlying the generation of phase precession are, however, unknown. In this letter, we show through mathematical analysis and numerical simulations that synaptic facilitation in combination with membrane potential oscillations of a neuron gives rise to phase precession. This biologically plausible model reproduces experimentally observed features of phase precession, such as (1) the progressive decrease of spike phases, (2) the nonlinear and often also bimodal relation between spike phases and the animal's place, (3) the range of phase precession being smaller than one theta cycle, and (4) the dependence of phase jitter on the animal's location within the place field. The model suggests that the peculiar features of the hippocampal mossy fiber synapse, such as its large efficacy, long-lasting and strong facilitation, and its phase-locked activation, are essential for phase precession in the CA3 region of the hippocampus.