Stimulus repetition produces a decrease of the response in many cortical areas and different modalities. This adaptation is highly prominent in macaque inferior temporal (IT) neurons. Here we ask how these repetition-induced changes in IT responses affect the accuracy by which IT neurons encode objects. This question bears on the functional consequences of adaptation, which are still unclear. We recorded the responses of single IT neurons to sequences of familiar shapes, each shown for 300 msec with an ISI of the same duration. The difference in shape between the two successively presented stimuli,that is, adapter and test, varied parametrically. The discriminability of the test stimuli was reduced for repeated compared with nonrepeated stimuli. In some conditions for which adapter and test shapes differed, the cross-adaptation resulted in an enhanced discriminability. These single cell results were confirmed in a second experiment in which we recorded multiunit spiking activity using a laminar microelectrode in macaque IT. Two familiar stimuli were presented successively for 500 msec each and separated with an ISI of the same duration. Trials consisted either of a repetition of the same stimulus or of their alternation. Small neuronal populations showed decreased classification accuracy for repeated compared with nonrepeated test stimuli, but classification was enhanced for the test compared with adapter stimuli when the test stimulus differed from recently seen stimuli. These findings suggest that short-term, stimulus-specific adaptation in IT supports efficient coding of stimuli that differ from recently seen ones while impairing the coding of repeated stimuli.