Children and adults benefit from a new word's phonological neighbors during explicit vocabulary instruction, suggesting that related prior knowledge can support new learning. This study examined the influence of lexical neighborhood structure during incidental word learning--limiting opportunities for strategically engaging prior knowledge--and tested the hypothesis that prior knowledge would provide additional support during subsequent consolidation. Children aged 8-10 years (Experiment 1) and adults (Experiment 2) were presented with 15 pseudowords embedded in a spoken story with illustrations, and were then tested on their recognition and recall of the new word-forms immediately, the next day, and one week later. The pseudowords had either no, one, or many English phonological neighbors, varying the potential connections to existing knowledge. After encountering the pseudowords in this incidental training paradigm, neither children nor adults benefited from phonological neighbors in recall, and children were better at recognizing items without neighbors. The neighbor influence did not change with opportunities for consolidation in either experiment, nor did it relate to learners' existing vocabulary ability. Exploratory analyses revealed that children experienced bigger benefits from offline consolidation overall, with adults outperforming children only for many-neighbor items one week after exposure. We discuss how the neighbor benefit in word learning may be constrained by learning context, and how the enhanced benefits of offline consolidation in childhood extend to vocabulary learning in more naturalistic contexts.