Viewers are typically better at remembering faces from their own race than from other races; however, it is not yet established whether this effect is due to memorial or perceptual processes. In this study, UK and Egyptian viewers were given a simultaneous face-matching task, in which the target faces were presented upright or upside down. As with previous research using face memory tasks, participants were worse at matching other-race faces than own-race faces and showed a stronger face inversion effect for own-race faces. However, subjects' performance on own and other-race faces was highly correlated. These data provide strong evidence that difficulty in perceptual encoding of unfamiliar faces contributes substantially to the other-race effect and that accounts based entirely on memory cannot capture the full data. Implications for forensic settings are also discussed.