This study investigated the functional significance of the N2 response to novel stimuli. In one condition, background, target, and deviant stimuli were simple geometric figures. In a second condition, all stimulus types were unfamiliar/unusual figures. In a third condition, background and target stimuli were unusual figures and deviant stimuli were simple shapes. Unusual figures, whether they were deviant, target, or background stimuli, evoked larger N2 responses than their simple, familiar counterparts. N2 elicited by an unusual background stimulus was larger than that evoked by simple, deviant stimuli, a pattern opposite that exhibited by the subsequent P3. Deviance from immediate context had limited influence over N2 amplitude. The results suggest that novelty N2 and novelty P3 reflect the processing of different aspects of “novel” visual stimuli. The novelty P3 is particularly sensitive to deviation from immediate context. In contrast, the novelty N2 is sensitive to deviation from long-term context that renders a stimulus unfamiliar and difficult to encode.