How does orthographic distinctiveness affect recall of structured (categorized) word lists? On one theory, enhanced item-specific information (e.g., more distinct encoding) in concert with robust relational information (e.g., categorical information) optimally supports free recall. This predicts that for categorically structured lists, orthographically distinct (OD) word lists should be recalled better than orthographically common (OC) word lists. Another possibility is that OD items produce a far-reaching impairment in relational processing, including that of categorical information. This view anticipates an advantage in recall for OC items relative to OD lists. In Experiment 1 categorically structured OC lists produced better recall performance and higher clustering than did categorically structured OD lists. When words were presented in capital letters, thereby minimizing orthographic distinctiveness, OC and OD lists showed equivalent recall and category clustering (Experiment 2). When recall was cued with category labels, OC items were still better recalled than OD items (Experiment 3). These patterns, along with category access and items-per-category recalled, are consistent with the interpretation that orthographic distinctiveness creates a disruption in encoding of inter-item associations within a category. This interpretation expands previous work indicating that orthographic distinctiveness disrupts encoding of serial order information, another kind of inter-item association.