Background: This research investigated the proposal that children with autism are impaired in processing information in its context. To date, this proposal rests almost exclusively on evidence from verbal tasks. Given evidence of visuo-spatial proficiency in autism in other areas of functioning, it is possible that the ability to use context is spared in the visual domain but impaired in the verbal domain. Method: Fifteen children with autism and 16 age and IQ-matched typically developing children were tested on their ability to take account of visual context information (Experiment 1) and verbal context information (Experiment 2) using an adaptation of Palmer's (1975) visual context task. They were also given an adaptation of Tager-Flusberg's (1991) visual and verbal semantic memory task (Experiment 3) and Frith and Snowling's (1983) homograph task (Experiment 4). Results: Experiment 1 showed that children with autism were facilitated by the provision of visual context information. Experiments 2 and 3 showed that the same children were also able to use both verbal context information when identifying words and semantic category information in a verbal task when naming and recalling words. However, in Experiment 4 these children had difficulties with a sentence-processing task when using sentence context to disambiguate homographs. Conclusions: These findings demonstrate that children with autism do not have a general difficulty in connecting context information and item information as predicted by weak central coherence theory. Instead the results suggest that there is specific difficulty with complex verbal stimuli and in particular with using sentence context to disambiguate meaning.