Although the acquisition of a novel word is apparently rapid, adult research suggests that integration of novel and existing knowledge (measured by engagement in lexical competition) requires sleep-associated consolidation. We present the first investigation of whether a similar time-course dissociation characterizes word learning across development. Consistent with previous research but counter to adults, 7–12-year-olds showed sleep-associated consolidation effects in declarative but not procedural memory. Nevertheless, the relationship between sleep and word learning in children was remarkably similar to the pattern for adults. Following exposure to nonword competitors (e.g. biscal) in the a.m. or p.m., children’s ability to recognize and recall the nonwords improved only after sleep (after approximately 12-hrs for the p.m. group and 24-hrs for the a.m. group), with performance stable 1 week later. Novel nonwords only induced lexical competition effects after sleep. These findings suggest that children utilize a dual memory system when acquiring and integrating new vocabulary and highlight sleep as integral to this process. A video abstract of this article can be viewed at http://www.youtube.com/watch?v=8mm8SDUXw_0&feature=plcp.