Upon hearing a novel word, language learners must identify its correct meaning from a diverse set of situationally relevant options. Such referential ambiguity could be reduced through "repetitive" exposure to the novel word across diverging learning situations, a learning mechanism referred to as "cross-situational learning." Previous research has focused on the amount of information learners carry over from 1 learning instance to the next. In the present article, we investigate how "context" can modulate the learning strategy and its efficiency. Results from 4 cross-situational learning experiments with adults suggest the following: (a) Learners encode more than the specific hypotheses they form about the meaning of a word, providing evidence against the recent view referred to as "single hypothesis testing." (b) Learning is faster when learning situations consistently contain members from a given group, regardless of whether this group is a semantically coherent group (e.g., animals) or induced through repetition (objects being presented together repetitively, just like a fork and a door may occur together repetitively in a kitchen). (c) Learners are subject to memory illusions, in a way that suggests that the learning situation itself appears to be encoded in memory during learning. Overall, our findings demonstrate that "realistic" contexts (such as the situation in which a given word has occurred; e.g., in the zoo or in the kitchen) help learners retrieve or discard potential referents for a word, because such contexts can be memorized and associated with a to-be-learned word.