Recent research has shown contextual diversity (i.e., the number of passages in which a given word appears) to be a reliable predictor of word processing difficulty. It has also been demonstrated that word-frequency has little or no effect on word recognition speed when accounting for contextual diversity in isolated word processing tasks. An eye-movement experiment was conducted wherein the effects of word-frequency and contextual diversity were directly contrasted in a normal sentence reading scenario. Subjects read sentences with embedded target words that varied in word-frequency and contextual diversity. All 1st-pass and later reading times were significantly longer for words with lower contextual diversity compared to words with higher contextual diversity when controlling for word-frequency and other important lexical properties. Furthermore, there was no difference in reading times for higher frequency and lower frequency words when controlling for contextual diversity. The results confirm prior findings regarding contextual diversity and word-frequency effects and demonstrate that contextual diversity is a more accurate predictor of word processing speed than word-frequency within a normal reading task.