Sleep is thought to play an important role in memory consolidation. Here we tested whether sleep alters the subjective value associated with objects located in spatial clusters that were navigated to in a large-scale virtual town. We found that sleep enhances a generalization of the value of high-value objects to the value of locally clustered objects, resulting in an impaired memory for the value of high-valued objects. Our results are consistent with (a) spatial context helping to bind items together in long-term memory and serve as a basis for generalizing across memories and (b) sleep mediating memory effects on salient/reward-related items.