Encountering new words multiple times in the input is crucial for incidental vocabulary acquisition. While there is extensive research exploring the impact of word frequency on both learning and processing of novel vocabulary during reading, there is a notable gap in studies examining how contextual factors impact these processes, especially when reading texts, rather than short sentences. The present study aims to fill this gap by exploring the effect of contextual diversity or sameness on adult L2 English learners’ processing and incidental learning of novel lexical items through repeated reading of complete texts. Participants (N = 42) read one short story three times as well as three different stories, while their eye movements were recorded. Each contextual condition (Same vs. Different) contained ten pseudowords, repeated six times across the treatment. Participants were tested on both immediate and delayed vocabulary learning via form and meaning recognition tests. Our results indicate that repeated readings of the same text led to faster processing as well as better short-term learning of novel vocabulary, although this advantage was not retained for long-term learning. In contrast, initial encoding and lexical integration took longer in the Different condition, although this was not reflected in higher vocabulary gains either in the short- or the long term.