This study examined the opportunities that pair and small group interaction offer for collaborative dialogue and second language (L2) vocabulary learning. It compared the performance of the same collaborative writing task by learners working in groups of four (n = 60) and in pairs (n = 50), focusing on the occurrence of lexical language-related episodes (LREs). Findings indicate that groups produced more lexical LREs than pairs and were able to solve correctly a higher percentage of these LREs. Although opportunities for individual learners to contribute to the conversation were more limited in small groups, the number of participants did not have a negative impact on learners’ rate of retention of the lexical knowledge co-constructed in interaction. The pretests and posttests showed that learners benefited from the LREs they initiated or resolved, as well as from observing their peers’ collaborative problem-solving activities. As a result, small group interaction resulted in significantly more instances of L2 vocabulary learning than pair interaction.