Perceived segregation in element-arrangement patterns composed of squares of equal size and luminance, but of two different hues, was investigated in two experiments. Element-arrangement patterns consist of two types of elements, arranged in alternating vertical stripes in the top and bottom regions and in a checkerboard pattern in the center region. Perceived segregation of the striped and checkerboard regions decreased with increasing luminance of the interspaces between the squares, a high-luminance surround, and the increased spacing of the squares. When the luminance of the horizontal interspaces was increased, the decrease in perceived segregation was greater than that when the luminance of the vertical interspaces was increased. Two explanations of the interference of the interspace luminance are discussed. One explanation is in terms of inhibitory interactions among cortical filters tuned to spatial frequency and orientation. A second explanation is in terms of interference with preattentive grouping processes.