When memories share similar features, this can lead to interference, and ultimately forgetting. With experience, however, interference can be resolved. This raises the important question of how memories change, with experience, to minimize interference. Intuitively, interference might be minimized by increasing the precision and accuracy of memories. However, recent evidence suggests a potentially adaptive role for memory distortions. Namely, similarity can trigger exaggerations of subtle differences between memories (repulsion). Here, we tested whether repulsion specifically occurs on feature dimensions along which memories compete and whether repulsion is predictive of reduced memory interference. To test these ideas, we developed synthetic faces in a two-dimensional face space (affect and gender). This allowed us to precisely manipulate similarity between faces and the feature dimension along which faces differed. In three experiments, participants learned to associate faces with unique cue words. Associative memory tests confirmed that when faces were similar (face pairmates), this produced interference. Using a continuous face reconstruction task, we found two changes in face memory that preferentially occurred along the feature dimension that was “diagnostic” of the difference between face pairmates: (1) there was a bias to remember pairmates with exaggerated differences (repulsion) and (2) there was an increase in the precision of feature memory. Critically, repulsion and precision were each associated with reduced associative memory interference, but these were statistically dissociable contributions. Collectively, our findings reveal that similarity between memories triggers dissociable, experience-dependent changes that serve an adaptive role in reducing interference.