Nonhyperbolic moveout analysis plays an increasingly important role in velocity model building because it provides valuable information for anisotropic parameter estimation. However, lateral heterogeneity associated with stratigraphic lenses such as channels and reefs can significantly distort the moveout parameters, even when the structure is relatively simple. We analyze the influence of a low-velocity isotropic lens on nonhyperbolic moveout inversion for horizontally layered VTI (transversely isotropic with a vertical symmetry axis) models. Synthetic tests demonstrate that a lens can cause substantial, laterally varying errors in the normal-moveout velocity (Vnmo) and the anellipticity parameter η. The area influenced by the lens can be identified using the residual moveout after the nonhyperbolic moveout correction as well as the dependence of errors in Vnmo and η on spreadlength. To remove such errors in Vnmo and η, we propose a correction algorithm designed for a lens embedded in a horizontally layered overburden. This algorithm involves estimation of the incidence angle of the ray passing through the lens for each recorded trace. With the assumption that lens-related perturbation of the raypath is negligible, the lens-induced traveltime shifts are computed from the corresponding zero-offset time distortion (i.e., from “pull-up” or “push-down” anomalies). Synthetic tests demonstrate that this algorithm substantially reduces the errors in the effective and interval parameters Vnmo and η. The corrected traces and reconstructed “background” values of Vnmo and η are suitable for anisotropic time imaging and producing a high-quality stack.