In the past five years, substantial progress has been made in our knowledge of the neural basis of amblyopia. Recent advances based on animal models are described, along with new psychophysical data showing perceptual deficits in amblyopic animals that are not explained by simple losses in contrast sensitivity. Studies of contour integration and integration of motion and form signals in the presence of noise show that 1) there are fundamental losses in temporal as well as spatial vision, 2) the losses extend to the fellow eye in many cases, 3) amblyopic animals are especially impaired in the presence of background noise, and 4) these losses must depend on a process downstream from area V1 in the extrastriate cortex.