We tested whether macaque inferior temporal neurons can signal the presence of their preferred shape independently of other shapes simultaneously present, by comparing the responses and selectivity of TE neurons to shapes (figures), either presented in isolation or overlapping another shape (background). The two overlapping shapes differed in color or texture and thus were easily segmentable. We found that the response and selectivity of TE neurons to the figure can be dramatically altered, most commonly reduced, when the figure is overlapping the background. This reduction in response was also present when the monkey was required to actively discriminate the figures from varying backgrounds during recording. The level of suppression depended on the shape of the background and on whether or not figure and background can be discriminated. These results indicate that responses of TE cells are not only determined by the properties of the figures but also are influenced by the properties of stimuli in the background.