Cognition depends on integrating sensory percepts with the memory of recent stimuli. However, the distributed nature of neural coding can lead to interference between sensory and memory representations. Here, we show that the brain mitigates such interference by rotating sensory representations into orthogonal memory representations over time. To study how sensory inputs and memories are represented, we recorded neurons from the auditory cortex of mice as they implicitly learned sequences of sounds. We found that the neural population represented sensory inputs and the memory of recent stimuli in two orthogonal dimensions. The transformation of sensory information into a memory was facilitated by a combination of ‘stable’ neurons, which maintained their selectivity over time, and ‘switching’ neurons, which inverted their selectivity over time. Together, these neural responses rotated the population representation, transforming sensory inputs into memory. Theoretical modeling showed that this rotational dynamic is an efficient mechanism for generating orthogonal representations, thereby protecting memories from sensory interference.