Both cerebral hemispheres are involved in language processing, each playing a unique role that may derive from differences in knowledge organization and on-line meaning integration. Here, we examine lateralized differences in knowledge representation and retrieval using event-related potentials (ERPs) elicited by words in sentences. Volunteers read pairs of sentences ending with three target types: (1) expected words, (2) unexpected words from the expected semantic category, and (3) unexpected words from an unexpected category. Context was presented word by word at fixation while targets were presented two degrees to the right or left of fixation. ERPs to unexpected endings were more negative than those to expected endings in both visual fields. However, when presented to the right visual field (left hemisphere), unexpected items from the expected category elicited smaller N400s than those from an unexpected category. In contrast, when presented to the left visual field (right hemisphere) all unexpected endings elicited N400s of similar amplitude. Thus, while both hemispheres are sensitive to context, only the left hemisphere is sensitive to semantic similarity between an unexpected ending and the expected completion. The results suggest lateralized differences in how new information is integrated into sentences. We propose that right hemisphere processing is best characterized as 'integrative'; new information is compared directly with context information. In contrast, left hemisphere processing is better characterized as 'predictive'; the processing of context leads to an expectation about the semantic features of upcoming items and new information is compared with that expectation rather than directly with the context.