This study attempted to elucidate the effects of context and level of processing on comprehension and memory for prose. Two aspects of memory for prose were investigated: the amount of information remembered and the semantic interpretation assigned to ambiguous paragraphs. Task instructions and exposure duration of the passages were manipulated to induce different levels of processing and to affect the amount of information retained. In order to influence the interpretation of the ambiguous paragraphs, different contexts, in the form of titles which would create bias, accompanied the text. Recall and recognition measures indicated that students remembered more information and more context-consonant information when given instructions which required processing the paragraphs at a semantic level. Thus, context determined which meaning was remembered from polysemous paragraphs only when incoming information was processed at a deeper, more semantic level. Tables of findings are included. (Author/JM)