We examined how linguistic context influences the nature of bilingual lexical activation. We hypothesized that in single-word context, form-related words would receive the strongest activation while, in sentence context, semantically related words would receive the strongest activation. Spanish-English bilinguals performed a semantic verification task on English target words preceded by a prime. On critical trials, the prime and target words were paired based either on a form-mediated relationship through the native language (L1), [e.g., bark (BARCO): BOAT] (Experiment 1) or on a semantically-mediated relationship [e.g., boat (BARCO): BARK] (Experiment 2). The prime word was presented either in isolation or after a sentence context. In Experiment 1 interference was observed in the single word condition only. In Experiment 2 interference was observed in both single-word and sentence contexts. The findings demonstrate that the context in which words are embedded has an impact on the type of lexical competitors that become active.