The cortical activity of subjects with compromised central vision (e.g., amblyopes) is thought to be much weaker for stimulation of the affected eye than in the fellow eye. Because these subjects are known to exhibit considerable difficulties in keeping steady fixation, we investigated the effects of anomalous fixation on their multifocal visual-evoked potential (mfVEP) responses using a dual Purkinje image (dPi) eye tracker. Our results show that mfVEP responses to stimulation of the central 5 degrees were depressed in the affected eye compared to those in the normal eye and the magnitude of response reductions was proportional to the degree of visual acuity loss in amblyopic subjects. Fixation was far less stable while viewing with the affected eye than with the fellow eye, some exhibiting jerk nystagmus and/or saccadic oscillations. Normal subjects with artificially imposed nystagmus showed similar reductions of VEP responses. The relative magnitudes of the deficits in mfVEP responses were tightly correlated with the degree of fixation instability. These results suggest that the interpretation of anomalous neural or perceptual processing in amblyopic subjects must take the effects of unsteady fixation during measurements into consideration in order to reveal the true nature and extent of sensory neural deficits.