Sleep after learning is often beneficial for memory. Reinstating an environmental context that was present at learning during subsequent retrieval also leads to superior declarative memory performance. This study examined how post-learning sleep, relative to wakefulness, impacts upon context-dependent memory effects. Thirty-two participants encoded word lists in each of two rooms (contexts), which were different in terms of size, odour and background music. Immediately after learning and following a night of sleep or a day of wakefulness, memory for all previously studied words was tested using a category-cued recall task in room one or two alone. Accordingly, a comparison could be made between words retrieved in an environmental context which was the same as, or different to, that of the learning phase. Memory performance was assessed by the difference between the number of words remembered at immediate and delayed retrieval. A 2 × 2 × 2 mixed ANOVA revealed an interaction between retrieval context (same/different to learning) and retention interval (sleep/wakefulness), which was driven by superior memory after sleep than after wake when learning and retrieval took place in different environmental contexts. Our findings suggest a sleep-related reduction in the extent to which context impacts upon retrieval. As such, these data provide initial support for the possibility that sleep dependent processes may promote a decontextualisation of recently formed declarative representations. © 2011 Springer-Verlag.