Abstract Research over the past two decades has documented the importance of sleep to language learning. Sleep has been suggested to play a role in establishing new speech representations as well; however, the neural mechanisms corresponding to sleep-mediated effects on speech perception behavior are unknown. In this study, we trained monolingual English-speaking adults to perceive differences between the Hindi dental vs. retroflex speech contrast in the evening. We examined the blood oxygen level dependent signal using functional magnetic resonance imaging during perceptual tasks on both the trained talker and on an untrained talker shortly after training, and again the next morning. We also employed diffusion tensor imaging to determine if individual differences in white matter structure could predict variability in overnight consolidation. We found greater activity in cortical regions associated with language processing (e.g., left insula) on the second day. Fractional anisotropy values in the anterior thalamic radiation and the uncinate fasciculus was associated with the magnitude of overnight change in perceptual behavior on the generalization (untrained) talker, after controlling for differences in sleep duration and initial learning. Our findings suggest that speech-perceptual information is subject to an overnight transfer of information to the cortex. Moreover, neural structure appears to be linked to individual differences in efficiency of overnight consolidation.