With the popularity of learning vocabulary online among English as a Foreign Language (EFL) learners today, educators and researchers have been considering ways to enhance the effectiveness of this approach. Prior research has underscored the significance of contextual clues in vocabulary acquisition. However, few studies have compared the context provided by instructional materials and that generated by learners themselves. Hence, this present study sought to explore the impact of internal-generated contextual clues in comparison to those provided by instructional materials on EFL learners’ online vocabulary acquisition. A total of 26 university students were enrolled and underwent electroencephalography (EEG). Based on a within-subjects design, all participants learned two groups of vocabulary words through a series of video clips under two conditions: one where the contexts were externally provided and the other where participants themselves generated the contexts. In this regard, participants were tasked with either viewing contextual clues presented on the screen or creating their own contextual clues for word comprehension. EEG signals were recorded during the learning process to explore neural activities, and post-tests were conducted to assess learning performance after each vocabulary learning session. Our behavioral results indicated that comprehending words with internal-generated contextual clues resulted in superior learning performance compared to using context provided by instructional materials. Furthermore, EEG data revealed that learners expended greater cognitive resources and mental effort in semantically integrating the meaning of words when they self-created contextual clues, as evidenced by stronger alpha and beta-band oscillations. Moreover, the stronger alpha-band oscillations and lower inter-subject correlation (ISC) among learners suggested that the generative task of creating context enhanced their top-down attentional control mechanisms and selective visual processing when learning vocabulary from videos. These findings underscored the positive effects of internal-generated contextual clues, indicating that instructors should encourage learners to construct their own contexts in online EFL vocabulary instruction rather than providing pre-defined contexts. Future research should aim to explore the limits and conditions of employing these two types of contextual clues in online EFL vocabulary learning. This could be achieved by manipulating the quality and understandability of contexts and considering learners’ language proficiency levels.