Abstract Background Categorization and its influence on perceptual discrimination are essential processes to organize information efficiently. Individuals with Autism Spectrum Condition (ASC) are suggested to display enhanced discrimination on the one hand, but also to experience difficulties with generalization and ignoring irrelevant differences on the other, which underlie categorization. Studies on categorization and discrimination in ASC have mainly focused on one process at a time, however, and typically only used either behavioral or neural measures in isolation. Here, we aim to investigate the interrelationships between these perceptual processes using novel stimuli sampled from a well-controlled artificial stimulus space. In addition, we complement standard behavioral psychophysical tasks with frequency-tagging EEG (FT-EEG) to obtain a direct, non-task related neural index of discrimination and categorization. Methods The study was completed by 38 adults with ASC and 38 matched neurotypical (NT) individuals. First, we assessed baseline discrimination sensitivity by administering FT-EEG measures and a complementary behavioral task. Second, participants were trained to categorize the stimuli into two groups. Finally, participants again completed the neural and behavioral discrimination sensitivity measures. Results Before training, NT participants immediately revealed a categorical tuning of discrimination, unlike ASC participants who showed largely similar discrimination sensitivity across the stimuli. During training, both autistic and non-autistic participants were able to categorize the stimuli into two groups. However, in the initial training phase, ASC participants were less accurate and showed more variability, as compared to their non-autistic peers. After training, ASC participants showed significantly enhanced neural and behavioral discrimination sensitivity across the category boundary. Behavioral indices of a reduced categorical processing and perception were related to the presence of more severe autistic traits. Bayesian analyses confirmed overall results. Limitations Data-collection occurred during the COVID-19 pandemic. Conclusions Our behavioral and neural findings indicate that adults with and without ASC are able to categorize highly similar stimuli. However, while categorical tuning of discrimination sensitivity was spontaneously present in the NT group, it only emerged in the autistic group after explicit categorization training. Additionally, during training, adults with autism were slower at category learning. Finally, this multi-level approach sheds light on the mechanisms underlying sensory and information processing issues in ASC.