It has been known for some time that visual acuity in amblyopia is higher for single letters than for letters in a row (termed crowding). Early work showed that this could not be accounted for on the basis of the destructive interaction of adjacent contours (termed contour interaction), which was shown to be, in resolution units, normal in amblyopia. We have re-examined this issue using a letter stimulus that is modulated about a mean light level. This allows an examination of the effects of contrast polarity and spatial filtering within the contour interaction paradigm. We show that the majority of strabismic amblyopes that we investigated exhibit an anomalous contour interaction that, in some cases, was dependent on the contrast polarity of the flanking stimuli. Furthermore, we show that while amblyopes do select the optimum scale of analysis for unflanked stimuli, they do not select the optimum scale of analysis for flanked stimuli. For reasons that may have to do with their poorer shape discrimination, they select a non-optimal scale to process flanked stimuli.