An estimated one-fifth of adults in the United States possess low literacy skills, which includes minimal proficiency in reading and difficulty processing contextual information. One way to study reading behavior of adults with low literacy is through eye movement studies; however, these investigations have been generally limited. Thus, the present study collected eye movement data (e.g., gaze duration, total time, regressions) from adult literacy learners while they read sentences to investigate online reading behavior. We manipulated the lexical ambiguity of the target words, context strength, and context location in the sentences. The role of vocabulary depth, which refers to the deeper understanding of a word in one's vocabulary, was also examined. Results show that adult literacy learners spent more total time reading ambiguous words compared to control words and vocabulary depth was significantly correlated with processing of lexically ambiguous words. Participants with higher depth scores were more sensitive to the complexity of ambiguous words and more effective at utilizing context compared to those with lower depth scores, which is reflected by more total time reading ambiguous words when more informative context was available and more regressions made to the target word by participants with higher depth scores. Overall, there is evidence to demonstrate the benefits of context use in lexical processing, as well as adult learners' sensitivity to changes in lexical ambiguity.