In conversation, interlocutors design referential expressions with respect to both local and historical contexts. Referential expressions that are more specific than necessary given the local context often can be motivated by the historical discourse context. To explore the breadth of the relevant discourse context in conversation, many studies have examined how past references from the previous discourse context affect current language use. Lexical differentiation is a phenomenon that reflects the contribution of discourse history to referential design. The term refers to speakers’ tendency to use two different labels (or modifiers) to name two subsequently presented objects from the same category. In multiple studies, this has been replicated in production, but the size of the effect has been small. I discuss the source of lexical differentiation and identify the factors that can cause the discourse history to exert a larger effect on referential design. Further, I introduce mixed findings regarding lexical differentiation in comprehension: listeners’ brain responses reveal clear sensitivity to the discourse history, but this is not observed in behavioral measures (e.g., eye-movements). Lastly, lexical differentiation can reveal the interaction of memory and referential design in cognitive processes, and, thus, I discuss potential future work that could elucidate the mechanisms that support interlocutors’ reference use on the basis of multifaceted measures.