Memory reactivation during sleep can shape new memories into a long-term form. Reactivation of memories can be induced via the delivery of auditory cues during sleep. Although this targeted memory reactivation (TMR) approach can strengthen newly acquired memories, research has tended to focus on single associative memories. It is less clear how TMR affects retention for overlapping associative memories. This is critical, given that repeated retrieval of overlapping associations during wake can lead to forgetting, a phenomenon known as retrieval-induced forgetting (RIF). We asked whether a similar pattern of forgetting occurs when TMR is used to cue reactivation of overlapping pairwise associations during sleep. Participants learned overlapping pairs-learned separately, interleaved with other unrelated pairs. During sleep, we cued a subset of overlapping pairs using TMR. While TMR increased retention for the first encoded pairs, memory decreased for the second encoded pairs. This pattern of retention was only present for pairs not tested prior to sleep. The results suggest that TMR can lead to forgetting, an effect similar to RIF during wake. However, this effect did not extend to memories that had been strengthened via retrieval prior to sleep. We therefore provide evidence for a reactivation-induced forgetting effect during sleep.