This study explores the nature of the oral-nasal vowel contrast in Brazilian Portuguese (BP). While vowel nasality is a salient property in the language, scholars differ on whether this property forms the basis of a phonological contrast. The presence of a consonant-like nasal resonance at the right edge of the heavily nasalized vowels (i.e., nasal appendix) leads to an analysis that nasal vowels may be product of a contextual nasalization rule (e.g., Camara Jr 1970, 1971), thus coarticulatory in nature. While most of the literature explores the issue from the perspective of production, the present study analyzes how BP listeners perceive nasal vowels in comparison to oral counterparts. If vowel nasality is coarticulatory, speakers should perceive it as they would other coarticulation; namely, they would perceptually compensate for vowel nasality, attributing the nasality to the nasal consonant element and hearing the vowel as essentially oral ( Beddor & Krakow 1999). If the nasality is phonemic, however, it should not induce compensation. A forced-choice comparison task was presented to a group of 43 BP listeners, who had to compare nasality in vowels of paired stimuli with and without the appendix. Results show that participants did not perceptually compensate for vowel nasality. The substance of the contrast lies in the combination of vowel quality changes associated with nasality and the presence of a nasal appendix.