In peripheral crowding, target perception can be strongly deteriorated by nearby flankers. What happens if flanker “A” crowds flanker “B” and “B” crowds target “C”? At 9° eccentricity, we determined offset discrimination thresholds for verniers. When the vernier was embedded in a square, performance deteriorated compared to the unflanked threshold (B crowds C). Interestingly, when adding more squares (flanker A), performance did not deteriorate as expected but strongly improved. Hence, when “A” crowds “B” and “B” crowds “C”, “A” un-crowds “C”. We propose that this un-crowding effect can be explained in terms of grouping. Grouping between the vernier and the central square leads to crowding. Grouping the central square and the nearby squares leads to grouping of the squares, ungrouping of the vernier, and un-crowding of the vernier.