This work was aimed at determining whether binaural interference occurs in electric hearing, and if so, whether it occurs as a consequence of perceptual grouping (central explanation) or if it is related to the spread of excitation in the cochlea (peripheral explanation). Six bilateral cochlear-implant listeners completed a series of experiments in which they judged the lateral position of a target pulse train, lateralized via interaural time or level differences, in the presence of an interfering diotic pulse train. The target and interferer were presented at widely separated electrode pairs (one basal and one apical). The results are broadly similar to those reported for acoustic hearing. All listeners but one showed significant binaural interference in at least one of the stimulus conditions. In all cases of interference, a robust recovery was observed when the interferer was presented as part of an ongoing stream of identical pulse trains, suggesting that the interference was at least partly centrally mediated. Overall, the results suggest that both simultaneous and sequential grouping mechanisms operate in electric hearing, at least for stimuli with a wide tonotopic separation.