Information that relates to a prior knowledge schema is remembered better and consolidates more rapidly than information that does not. Another factor that influences memory consolidation is sleep and growing evidence suggests that sleep-related processing is important for integration with existing knowledge. Here, we perform an examination of how sleep-related mechanisms interact with schema-dependent memory advantage. Participants first established a schema over 2 weeks. Next, they encoded new facts, which were either related to the schema or completely unrelated. After a 24 h retention interval, including a night of sleep, which we monitored with polysomnography, participants encoded a second set of facts. Finally, memory for all facts was tested in a functional magnetic resonance imaging scanner. Behaviorally, sleep spindle density predicted an increase of the schema benefit to memory across the retention interval. Higher spindle densities were associated with reduced decay of schema-related memories. Functionally, spindle density predicted increased disengagement of the hippocampus across 24 h for schema-related memories only. Together, these results suggest that sleep spindle activity is associated with the effect of prior knowledge on memory consolidation.