An important issue in theories of word learning is how abstract or context-specific representations of novel words are. One aspect of this broad issue is how well learners maintain information about the source of novel words. We investigated whether listeners’ source memory was better for words learned from members of their in-group (students of their own university) than it is for words learned from members of an out-group (students from another institution). In the first session, participants saw 6 faces and learned which of the depicted students attended either their own or a different university. In the second session, they learned competing labels (e.g., citrus-peller and citrus-schiller; in English, lemon peeler and lemon stripper) for novel gadgets, produced by the in-group and out-group speakers. Participants were then tested for source memory of these labels and for the strength of their in-group bias, that is, for how much they preferentially process in-group over out-group information. Analyses of source memory accuracy demonstrated an interaction between speaker group membership status and participants’ in-group bias: Stronger in-group bias was associated with less accurate source memory for out-group labels than in-group labels. These results add to the growing body of evidence on the importance of social variables for adult word learning.