Successful reading instruction entails not only acquiring new words but also remembering them after training has finished and accessing their word-specific representations when they are encountered in new text. We report two studies demonstrating that acquisition, retention, and transfer of unfamiliar words were affected differentially by isolated word and context training. Materials were individualized to include only those words that average readers in second grade were unable to name in context. Different words were trained in each condition; context training presented words in stories, and isolated word training presented words on flashcards. Together, the studies show that context training promotes word acquisition beyond that experienced from reading words in isolation. Contrary to the prevailing opinion, memory performance for words trained in context and in isolation did not differ; children demonstrated excellent retention over an 8-day interval in both conditions. Finally, transfer was maximized when the congruency between training and testing was high. Therefore, when reading trained words in novel circumstances, the best method of training was mediated by the transfer task employed at test.