There is a growing understanding that the parafoveal preview effect during reading may represent a combination of preview benefits and preview costs due to interference from parafoveal masks. It has been suggested that visually degrading the parafoveal masks may reduce their costs, but adult readers were later shown to be highly sensitive to degraded display changes. Four experiments examined how preview benefits and preview costs are influenced by the perception of distinct parafoveal degradation at the target word location. Participants read sentences with four preview types (identity, orthographic, phonological, and letter-mask preview) and two levels of visual degradation (0% vs. 20%). The distinctiveness of the target word degradation was either eliminated by degrading all words in the sentence (Experiments 1a–2a) or remained present, as in previous research (Experiments 1b–2b). Degrading the letter masks resulted in a reduction in preview costs, but only when all words in the sentence were degraded. When degradation at the target word location was perceptually distinct, it induced costs of its own, even for orthographically and phonologically related previews. These results confirm previous reports that traditional parafoveal masks introduce preview costs that overestimate the size of the true benefit. However, they also show that parafoveal degradation has the unintended consequence of introducing additional costs when participants are aware of distinct degradation on the target word. Parafoveal degradation appears to be easily perceived and may temporarily orient attention away from the reading task, thus delaying word processing.