The present study investigated the cognitive nature of second language (L2) lexical processing in sentence context. We examined bilinguals’ L2 word recognition performance for language-ambiguous words [cognates (e.g., piano); and homographs (e.g., pan)] in two sentence context experiments with highly proficient Spanish-English bilinguals living in a bilingual community (Experiment 1) and with intermediate proficiency Spanish-English bilinguals living in a monolingual community (Experiment 2). To determine the influence of sentence constraint on cross-language activation, the critical words and their matched controls were inserted in low- and high-constraint sentences. In low-constraint sentences significant cognate facilitation was observed, suggesting that both languages were active and influencing processing. In high-constraint sentences the effects of cognate facilitation were eliminated. This interaction between cognate status and sentence constraint demonstrates that sentence context can restrict non-selectivity when there is sufficient semantic information to suppress the non-target language. The fact that this interaction was observed for both bilingual groups suggests that even less proficient bilinguals, who do not communicate daily in the L2, can use context to constrain cross-language lexical competition. Implications for current models of bilingual lexical access are discussed.