Dynamic image deformation produces the perception of a transparent material that appears to deform the background image by light refraction. Since past studies on this phenomenon have mainly used subjective judgment about the presence of a transparent layer, it remains unsolved whether this is a real perceptual transparency effect in the sense that it forms surface representations, as do conventional transparency effects. Visual computation for color and luminance transparency, induced mainly by surface-contour information, can be decomposed into two components: surface formation to determine foreground and background layers, and scission to assign color and luminance to each layer. Here we show that deformation-induced perceptual transparency aids surface formation by color transparency and consequently resolves color scission. We asked observers to report the color of the front layer in a spatial region with a neutral physical color. The layer color could be seen as either reddish or greenish depending on the spatial context producing the color transparency, which was, however, ambiguous about the order of layers. We found that adding to the display a deformation-induced transparency that could specify the front layer significantly biased color scission in the predicted way if and only if the deformation-induced transparency was spatially coincident with the interpretation of color transparency. The results indicate that deformation-induced transparency is indeed a novel type of perceptual transparency that plays a role in surface formation in cooperation with color transparency.