Peripheral word recognition is impaired by crowding, the harmful influence of surrounding objects (flankers) on target identification. Crowding is usually weaker when the target and the flankers differ (for example in color). Here, we investigated whether reducing crowding at syllable boundaries improved peripheral word recognition. In Experiment 1, a target letter was flanked by single letters to the left and right and presented at 8° in the lower visual field. Target and flankers were either the same or different in regard to contrast polarity, color, luminance, and combined color/luminance. Crowding was reduced when the target differed from the flankers in contrast polarity, but not in any of the other conditions. Using the same color and luminance values as in Experiment 1, we measured recognition performance (speed and accuracy) for uniform (e.g., all letters black), congruent (e.g., alternating black and white syllables), and incongruent (e.g., alternating black and white non-syllables) words in Experiment 2. Participants verbally reported the target word, briefly displayed at 8° in the lower visual field. Congruent and incongruent words were recognized slower compared to uniform words in the opposite contrast polarity condition, but not in the other conditions. Our results show that the same feature contrast between the target and the flankers that yielded reduced crowding, deteriorated peripheral word recognition when applied to syllables and non-syllabic word parts. We suggest that a potential advantage of reduced crowding at syllable boundaries in word recognition is counteracted by the disruption of word uniformity.