Optical blur in the peripheral retina is known to be highly anisotropic due to nonrotationally symmetric wavefront aberrations such as astigmatism and coma. At the neural level, the visual system exhibits anisotropies in orientation sensitivity across the visual field. In the fovea, the visual system shows higher sensitivity for cardinal over diagonal orientations, which is referred to as the oblique effect. However, in the peripheral retina, the neural visual system becomes more sensitive to radially-oriented signals, a phenomenon known as the meridional effect. Here, we examined the relative contributions of optics and neural processing to the meridional effect in 10 participants at 0°, 10°, and 20° in the temporal retina. Optical anisotropy was quantified by measuring the eye's habitual wavefront aberrations. Alternatively, neural anisotropy was evaluated by measuring contrast sensitivity (at 2 and 4 cyc/deg) while correcting the eye's aberrations with an adaptive optics vision simulator, thus bypassing any optical factors. As eccentricity increased, optical and neural anisotropy increased in magnitude. The average ratio of horizontal to vertical optical MTF (at 2 and 4 cyc/deg) at 0°, 10°, and 20° was 0.96 ± 0.14, 1.41 ± 0.54 and 2.15 ± 1.38, respectively. Similarly, the average ratio of horizontal to vertical contrast sensitivity with full optical correction at 0°, 10°, and 20° was 0.99 ± 0.15, 1.28 ± 0.28 and 1.75 ± 0.80, respectively. These results indicate that the neural system's orientation sensitivity coincides with habitual blur orientation. These findings support the neural origin of the meridional effect and raise important questions regarding the role of peripheral anisotropic optical quality in developing the meridional effect and emmetropization.