We present a new classification architecture based on autoassociative neural networks that are used to learn discriminant models of each class. The proposed architecture has several interesting properties with respect to other model-based classifiers like nearest-neighbors or radial basis functions: it has a low computational complexity and uses a compact distributed representation of the models. The classifier is also well suited for the incorporation of a priori knowledge by means of a problem-specific distance measure. In particular, we will show that tangent distance (Simard, Le Cun, & Denker, 1993) can be used to achieve transformation invariance during learning and recognition. We demonstrate the application of this classifier to optical character recognition, where it has achieved state-of-the-art results on several reference databases. Relations to other models, in particular those based on principal component analysis, are also discussed.