Incompatible images presented to the two eyes lead to perceptual oscillations in which one image at a time is visible. Early models portrayed this binocular rivalry as involving reciprocal inhibition between monocular representations of images, occurring at an early visual stage prior to binocular mixing. However, psychophysical experiments found conditions where rivalry could also occur at a higher, more abstract level of representation. In those cases, the rivalry was between image representations dissociated from eye-of-origin information, rather than between monocular representations from the two eyes. Moreover, neurophysiological recordings found the strongest rivalry correlate in inferotemporal cortex, a high-level, predominantly binocular visual area involved in object recognition, rather than early visual structures. An unresolved issue is how can the separate identities of the two images be maintained after binocular mixing in order for rivalry to be possible at higher levels? Here we demonstrate that after the two images are mixed, they can be unmixed at any subsequent stage using a physiologically plausible non-linear signal-processing algorithm, non-negative matrix factorization, previously proposed for parsing object parts during object recognition. The possibility that unmixed left and right images can be regenerated at late stages within the visual system provides a mechanism for creating various binocular representations and interactions de novo in different cortical areas for different purposes, rather than inheriting then from early areas. This is a clear example how non-linear algorithms can lead to highly non-intuitive behavior in neural information processing.