Previous research using virtual environments has revealed a location-updating effect in which there is a decline in memory when people move from one location to another. Here we assess whether this effect reflects the influence of the experienced context, in terms of the degree of immersion of a person in an environment, as suggested by some work in spatial cognition, or by a shift in context. In Experiment 1, the degree of immersion was reduced by using smaller displays. In comparison, in Experiment 2 an actual, rather than a virtual, environment was used, to maximize immersion. Location-updating effects were observed under both of these conditions. In Experiment 3, the original encoding context was reinstated by having a person return to the original room in which objects were first encoded. However, inconsistent with an encoding specificity account, memory did not improve by reinstating this context. Finally, we did a further analysis of the results of this and previous experiments to assess the differential influence of foregrounding and retrieval interference. Overall, these data are interpreted in terms of the event horizon model of event cognition and memory.