When faced with an ambiguous novel word such as ‘ranana’, how do listeners decide whether they heard a mispronunciation of a familiar target (‘banana’) or a label for an unfamiliar novel item? We examined this question by combining visual-world eye-tracking with an offline forced-choice judgment paradigm. In two studies, we show evidence that participants entertain repair and novel label interpretations of novel words that were created by editing a familiar target word in multiple phonetic features (Experiment 1) or a single phonetic feature (Experiment 2). Repair (‘ranana’ = a banana) and learning (‘ranana’ = a novel referent) were both common interpretation strategies, and learning was strongly associated with visual attention to the novel image after it was referred to in a sentence. This indicates that repair and learning are both valid strategies for understanding novel words that depend upon a set of similar mechanisms, and suggests that attention during listening is causally related to whether one learns or repairs.