Phonetic variation is sensitive to lexical properties of words, such as frequency and neighborhood density, as well as contextual properties, such as predictability. Previous studies of lexically-induced variation have observed that both vowels and consonants are phonetically enhanced in words from dense neighborhoods, and have suggested that this effect is modulated only by the number and frequency of the neighbors. To determine whether contextual variation is driven by cognitive processes similar to those underlying lexical enhancement, three experiments examined the effect of contextually salient neighbors on the phonetic realization of vowels and initial consonant aspiration. Enhancement was found only for consonants, and only when the neighbor differed from the target word in a single feature. Unlike lexical effects, contextually-driven phonetic enhancement reflects a highly specific competition among words, a finding that can be rationalized in terms of the utility of speaker effort within a Bayesian model of word communication.