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Memory is inherently context-dependent: internal and environmental cues become bound to learnt information, and the later absence of these cues can impair recall. Here, we developed an approach to leverage context-dependence to optimise learning of challenging, interference-prone material. While navigating through desktop virtual reality (VR) contexts, participants learnt 80 foreign words in two phonetically similar languages. Those participants who learnt each language in its own unique context showed reduced interference and improved one-week retention (92%), relative to those who learnt the languages in the same context (76%)—however, this advantage was only apparent if participants subjectively experienced VR-based contexts as “real” environments. A follow-up fMRI experiment confirmed that reinstatement of brain activity patterns associated with the original encoding context during word retrieval was associated with improved recall performance. These findings establish that context-dependence can be harnessed with VR to optimise learning and showcase the important role of mental context reinstatement.