In this quasi-experimental study, the effects of lexical coverage through pseudo word manipulation in dialogue comprehension are investigated. Forty-four first-year students in a Japanese university listened to five dialogues at different lexical coverage levels: 98%, 95%, 90%, 85%, and 83%. The results of the comprehension tests confirm the results seen in narrative, monologic lexical coverage studies that it is possible for intermediate EFL learners to attain adequate listening comprehension on texts with as little as 90% lexical coverage. However, variation in participants' scores on higher lexical coverage dialogues suggest pseudo word distribution and topic familiarity might be acting as confounding variables in lexical coverage studies which use pseudo word manipulation. Suggestions for methodological reform for future projects on this subject are provided.