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During sleep, recently acquired episodic memories (i.e., autobiographical memories for specific events) are strengthened and transformed, a process termed consolidation. These memories are contextual in nature, with details of specific features interwoven with more general properties such as the time and place of the event. In this study, we hypothesized that the context in which a memory is embedded would guide the process of consolidation during sleep. To test this idea, we used a spatial memory task and considered changes in memory over a 10-h period including either sleep or wake. In both conditions, participants ( N = 62) formed stories that contextually bound four objects together and then encoded the on-screen spatial position of all objects. Results showed that the changes in memory over the sleep period were correlated among contextually linked objects, whereas no such effect was identified for the wake group. These results demonstrate that context-binding plays an important role in memory consolidation during sleep.