Although contexts play many roles during training and also during testing, over the last four decades theories of learning have predominantly focused on one or the other of two families of functions served by contexts. In this selective review, we summarize recent data concerning these two functions and their interrelationship. The first function is similar to that of discrete cues, and allows contexts to elicit conditioned responses and compete with discrete events for behavioral control. The second function is modulatory, and similar to that of discrete occasion setters in that in this role contexts do not elicit conditioned responses by themselves, but rather modulate instrumental responding or responding to Pavlovian cues. We first present evidence for these two functions, and then suggest that the spacing of trials, amount of training, and contiguity are three determinants of the degree to which the context will play each function. We also conclude that these two functions are not mutually exclusive, and that future research would benefit from identifying the conditions under which their functions dominate behavioral control. We close by discussing some misconceptions concerning contexts.