Humans are excellent at modifying our behaviour depending on context. For example, we will change how we explore when losses are possible compared to when losses are not possible. However, it remains unclear what specific cognitive and neural processes are modulated when exploring in different contexts. Here, we had participants learn within two different contexts: in one the participants could lose points while in the other the participants could not. Our goal was to determine how the inclusion of losses impacted human exploratory behaviour (experiment one), and whether we could explain the neural basis of these effects using EEG (experiment two). In experiment one, we found that participants preferred less-variable choices and explored less often when losses were possible. In addition, computational modelling revealed that participants engaged in less random exploration, had a lower rate of learning, and showed lower choice stickiness when losses were possible. In experiment two, we replicated these effects while examining a series of neural signals involved in exploration. During exploration, signals tied to working memory and learning (P3b), attention orienting (P3a) and motivation (late positive potential
an exploratory analysis) were enhanced when losses were possible. These neural differences contribute to why exploratory behaviour is changed by different learning contexts and can be explained by the theoretical claim that losses recruit attention and lead to increased task focus. These results provide insight into the cognitive processes that underlie exploration, and how exploratory behaviour changes across contexts.