Individuals with autism spectrum disorder (ASD) demonstrate intact or superior local processing of visual-spatial tasks. We investigated the hypothesis that in a disembedding task, autistic individuals exhibit a more local processing style than controls, which is reflected by altered electromagnetic brain activity in response to embedded stimuli and enhanced activity of early visual areas. Ten autistic and ten matched control participants underwent 151-channel whole-head magnetoencephalography. Participants were presented with 400 embedded or isolated letters ("S" or "H") and asked to indicate which of the two letters was shown. Performance was equal in both groups, but event-related magnetic fields differed between groups in an early (100-150ms) and a later (350-400ms) time window. In the early time window, autistic individuals differed from control participants in the embedded, but not in the isolated condition, reflecting reduced processing of the irrelevant context in autistic individuals. In the later time window, amplitude differences between the embedded and isolated conditions were measured in control participants only, suggesting that "disembedding" processes were not required in autistic individuals. Source localisation indicated that activity in individuals with ASD peaked in the primary visual cortex in both conditions and time windows indicating an effortless (automatic, bottom-up) local process, whereas activity in controls peaked outside the visual cortex. (Contains 5 figures and 3 tables.)