Previous studies have shown that segmentation skills are language-specific, making it difficult to segment continuous speech in an unfamiliar language into its component words. Here we present the first study capturing the delay in segmentation and recognition in the foreign listener using ERPs. We compared the ability of Dutch adults and of English adults without knowledge of Dutch (‘foreign listeners’) to segment familiarized words from continuous Dutch speech. We used the known effect of repetition on the event-related potential (ERP) as an index of recognition of words in continuous speech. Our results show that word repetitions in isolation are recognized with equivalent facility by native and foreign listeners, but word repetitions in continuous speech are not. First, words familiarized in isolation are recognized faster by native than by foreign listeners when they are repeated in continuous speech. Second, when words that have previously been heard only in a continuous-speech context re-occur in continuous speech, the repetition is detected by native listeners, but is not detected by foreign listeners. A preceding speech context facilitates word recognition for native listeners, but delays or even inhibits word recognition for foreign listeners. We propose that the apparent difference in segmentation rate between native and foreign listeners is grounded in the difference in language-specific skills available to the listeners.