Using a “study-test” paradigm, two experiments were conducted, with different encoding condition, to investigate the mechanism of the perceptual interference effect of memory. In Exp. 2 two kinds of retention interference conditions were used in the test phase: The orthographically similar interference condition in which the words here were orthographically similar with the study words and the homophonic interference condition in which the words had the same pronunciation with the study words. The result indicated that: (1) Chinese subjects performed a lower accurate and a longer RT in recognition test in the perceptual interference condition than the intact condition in the Chinese characters. (2) Perceptual interference condition made no difference with intact condition in the English words. (3) In comparison with the homophonic interference in retention, the orthographically similar interference in retention was more negative to the perceptual interference effect, and supported the view that the perceptual interference effect reflects the phonetic advantage of English words processing.