Previous investigations comparing auditory event-related potentials (ERPs) to words whose meanings infants did or did not comprehend, found bilateral differences in brain activity to known versus unknown words in 13-month-old infants, in contrast with unilateral, left hemisphere, differences in activity in 20-month-old infants. We explore two alternative explanations for these findings. Changes in hemispheric specialization may result from a qualitative shift in the way infants process known words between 13 and 20 months. Alternatively, hemispheric specialization may arise from increased familiarity with the individual words tested. We contrasted these two explanations by measuring ERPs from 20-month-old infants with high and low production scores, for novel words they had just learned. A bilateral distribution of ERP differences was observed in both groups of infants, though the difference was larger in the left hemisphere for the high producers. These findings suggest that word familiarity is an important factor in determining the distribution of brain regions involved in word learning. An emerging left hemispheric specialization may reflect increased efficiency in the manner in which infants process familiar and novel words.