The unprecedented efforts to minimize the effects of the COVID-19 pandemic introduce a new arena for human face recognition in which faces are partially occluded with masks. Here, we tested the extent to which face masks change the way faces are perceived. To this end, we evaluated face processing abilities for masked and unmasked faces in a large online sample of adult observers (n = 496) using an adapted version of the Cambridge Face Memory Test, a validated measure of face perception abilities in humans. As expected, a substantial decrease in performance was found for masked faces. Importantly, the inclusion of masks also led to a qualitative change in the way masked faces are perceived. In particular, holistic processing, the hallmark of face perception, was disrupted for faces with masks, as suggested by a reduced inversion effect. Similar changes were found whether masks were included during the study or the test phases of the experiment. Together, we provide novel evidence for quantitative and qualitative alterations in the processing of masked faces that could have significant effects on daily activities and social interactions.