We present two experiments that examine sensory processing during conditions of inattentional blindness. A large rectangular frame that normally induces a Roelofs effect can go unreported due to inattentional blindness. Even when participants fail to report the frame, they mislocalize an attended target in a way consistent with having processed the frame. A more demanding visuospatial distractor task can increase inattentional blindness during conditions of divided attention, but has no effect on the spatial mislocalization illusion. Our results support theories that postulate a significant amount of perceptual processing in the absence of attention.