This study investigated the effect of sleep on novel word learning through reading context. Seventy-four healthy young adults attended two testing sessions, with either overnight sleep (sleep group) or daytime wakefulness (wake group) occurring between the sessions. At the initial learning session, participants identified the hidden meanings of novel words embedded within sentence contexts and were subsequently tested on their recognition of the novel word meanings. A recognition test was also conducted at the delayed session. The analyses revealed comparable recognition of novel word meanings for the sleep and wake group at both the initial and the delayed session, indicating that there was no benefit of sleep compared with wakefulness for novel word learning through context. Overall, this study highlights the critical influence of encoding method on sleep-dependent learning, where not all forms of word learning appear to benefit from sleep for consolidation.