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Semantic ambiguity has been shown to slow comprehension, although it is unclear whether this ambiguity disadvantage is attributable to competition in semantic activation or difficulties in response selection. We tested the two accounts by examining semantic relatedness decisions to homonyms, or words with multiple unrelated meanings (e.g., football/electric fan ). Our behavioral results showed that the ambiguity disadvantage arises only when the different meanings of words are of comparable frequency, and are thus activated in parallel. Critically, this effect was observed regardless of response-selection difficulties, both when the different meanings triggered inconsistent responses on related trials (e.g., fan-breeze) and consistent responses on unrelated trials (e.g., fan-snake ). Our electrophysiological results confirmed that this effect arises during semantic activation of the ambiguous word, indexed by the N400, not during response selection. Overall, the findings show that ambiguity resolution involves semantic competition and delineate why and when this competition arises. (PsycInfo Database Record (c) 2020 APA, all rights reserved).