An important characteristic of autism spectrum disorder (ASD) is increased visual detail perception. Yet, there is no standing neurobiological explanation for this aspect of the disorder. We show evidence from EEG data, from 31 control subjects (three females) and 13 subjects (two females) aged 16-28 years, for a specific impairment in object boundary detection in ASD, which is present as early as 120 ms after stimulus presentation. In line with a neural network model explicating the role of feedforward, horizontal and recurrent processing in visual perception, we can attribute this deficit to a dysfunction of horizontal connections within early visual areas. Interestingly, ASD subjects showed an increase in subsequent activity at lateral occipital sites (225 ms), which might reflect a compensational mechanism. In contrast, recurrent processing between higher and lower visual areas (around 260 ms), associated with the segregation between figure and background, was normal. Our results show specific neural abnormalities in ASD related to low-level visual processing. In addition, given the reconciliation between our findings and previous neuropathology and neurochemistry research, we suggest that atypical horizontal interactions might reflect a more general neural abnormality in this disorder.