To probe the processing of gaze-dependent positional information and gaze-independent order information when matching strings of characters, we compared effects of visual similarity (hypothesized to affect gaze-centered position coding) with the effects of character transpositions (hypothesized to affect the processing of gaze-independent order information). In Experiment 1 we obtained empirical measures of visual similarity for pairs of characters, separately for uppercase consonants and keyboard symbols. These similarity values were then used in Experiment 2 to create pairs of 4-character stimuli (4 letters or 4 symbols) that could differ by substituting one character by a different character from the same category that was visually similar (e.g., FJDK-FJBK) or dissimilar (e.g., FJVK-FJBK). We also compared the effects of transposing two characters (e.g., FBJK-FJBK) with substituting two characters (e.g., FHSK-FJBK). "Different" responses were harder to make in the single substitution condition when the substituted character was visually similar, and this effect was not conditioned by character type. On the other hand, transposition costs (i.e., greater difficulty in detecting a difference with transpositions compared with double substitutions) were greater for letters compared to symbols. We conclude that visual similarity mainly affects the generic gazedependent processing of complex visual features, and that the encoding of letter order involves a mechanism that is specific to reading.