We assessed the impact of visual similarity on written word identification by having participants learn new words (e.g. BANARA) that were neighbours of familiar words that previously had no neighbours (e.g. BANANA). Repeated exposure to these new words made it more difficult to semantically categorize the familiar words. There was some evidence of interference following an initial training phase, and clear evidence of interference the following day (without any additional training); interference was larger still following more training on the second day. These findings lend support to models of reading that include lexical competition as a key process.