AbstractRest and sleep not only strengthen existing memories but also reorganise memories to generate new knowledge that extends beyond direct experience. However, it remains unclear bothhowmemories are reorganised and the effect of this reorganisation on behaviour. Here, we designed a novel protocol to casually manipulate memory consolidation during rest using awake, contextual targeted memory reactivation (TMR). We found that promoting memory consolidation during rest qualitatively reorganises memories byforming ‘shortcuts’ between memorieswhich have not been experienced together. These shortcuts in memory extend beyond direct experience to facilitate our ability to make novel inferences. A series of control tests indicate that inference performance cannot be explained by quantitative strengthening of the experienced component links but are rather explained by qualitative changes in the cognitive map which involve formation of new shortcuts. Interestingly, we show that representing a shortcut may come with limitations, as shortcuts cannot be readily updated in response to rapid changes in the environment. Together, these findings reveal how memories are reorganised during awake rest to construct a cognitive map of our environment, while highlighting the constraints set by a trade-off between efficient and flexible behaviour.