Inferior temporal (IT) cortex as the final stage of the ventral visual pathway is involved in visual object recognition. In our everyday life we need to recognize visual objects that are degraded by noise. Psychophysical studies have shown that the accuracy and speed of the object recognition decreases as the amount of visual noise increases. However, the neural representation of ambiguous visual objects and the underlying neural mechanisms of such changes in the behavior are not known. Here, by recording the neuronal spiking activity of macaque monkeys’ IT we explored the relationship between stimulus ambiguity and the IT neural activity. We found smaller amplitude, later onset, earlier offset and shorter duration of the response as visual ambiguity increased. All of these modulations were gradual and correlated with the level of stimulus ambiguity. We found that while category selectivity of IT neurons decreased with noise, it was preserved for a large extent of visual ambiguity. This noise tolerance for category selectivity in IT was lost at 60% noise level. Interestingly, while the response of the IT neurons to visual stimuli at 60% noise level was significantly larger than their baseline activity and full (100%) noise, it was not category selective anymore. The latter finding shows a neural representation that signals the presence of visual stimulus without signaling what it is. In general these findings, in the context of a drift diffusion model, explain the neural mechanisms of perceptual accuracy and speed changes in the process of recognizing ambiguous objects.