This paper proposes the Variational Lossy Autoencoder (VLAE), a VAE that uses autoregressive priors and decoders to deliberately discard local detail while retaining global structure. By limiting the receptive field of the PixelCNN decoder and employing autoregressive flows as the prior, the model forces the latent code to capture only high-level information, yielding controllable lossy representations. Experiments on MNIST, Omniglot, Caltech-101 Silhouettes and CIFAR-10 set new likelihood records for VAEs and demonstrate faithful global reconstructions with replaced textures. VLAE influenced research on representation bottlenecks, pixel-VAE hybrids, and state-of-the-art compression and generation benchmarks.